What is Annual Mortgage Statement

Annual mortgage statement is a yearly report sent to a mortgagor by the mortgagee's servicer. This statement provides the borrower with key information related to the loan, activity on the account and the remaining balances owed or other financial obligations for which the borrower is responsible. This information includes a summary of the amount of interest and points paid during the preceding year and the remaining principal balance of the mortgage. If taxes and insurance are escrowed, the statement will also list the amount of taxes paid during the preceding year on behalf of the mortgagor by the servicer, along with an ending escrow balance.

BREAKING DOWN Annual Mortgage Statement

Annual mortgage statements are important financial documents that contain sensitive information. As with other critical documents involving financial matters, it is important for anyone preparing or handling these documents to keep them private and security. The recipient must also review this document to ensure its accuracy. Borrowers should compare the annual statement with their own records, and report any mistakes or oversights to the lending institution right away so that a corrected statement can be issued, if necessary.

Most financial institutions now make annual mortgage statements, along with monthly statements and other account information and updates, accessible to customers online. This offers additional convenience because borrowers can review and print their statements as soon as they are available, without the need to wait for this paperwork to arrive in the mail.

Annual mortgage statement and tax issues

In the United States, the annual mortgage statement is also known as the year end statement or the mortgage interest statement. It is often sent in the form of, or in addition to, the Form 1098, which is used when filing taxes.

The IRS requires a lender or other business to send a Form 1098 to any individual or entity that has paid at least $600 in interest during a specific calendar year. In the case of a mortgage, this form will list the mortgage interest paid and any points related to the loan. Borrowers need this form if they want to claim any related tax deductions for which they may be entitled. The Form 1098 will also show any refunds, credits or overpayments of interest made by the borrower during that year. Taxpayers would need to consult with their accountant or tax preparer or review the IRS guidelines to find out if the interest they paid is deductible and, if so, how to list this information on their tax return.