Annual Mortgage Statement

What Is an Annual Mortgage Statement?

An annual mortgage statement is a statement sent to a mortgagor by the mortgagee’s servicer. The statement typically indicates the interest paid on a mortgage, the current mortgage balance, the current interest rate, the term of the loan, the amount remaining on the mortgage term, the escrowed taxes and/or insurance that the lender paid on the borrower’s behalf, contact information for the lender, and if there are any arrears—or overdue payments—on the mortgage.

Key Takeaways

  • An annual mortgage statement is a document sent to a borrower by the mortgage holder.
  • 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.
  • A mortgage statement is provided to the borrower periodically, at least annually, and can be provided to the borrower upon request.
  • In the United States, the annual mortgage statement is also known as the year-end statement, the mortgage interest statement, or Form 1098.

How an Annual Mortgage Statement Works

Annual mortgage statements are prepared by the mortgage lender. These documents are compiled once each year and sent out to borrowers. The purpose of the annual mortgage statement is to provide the borrower with key information related to the loan, activity on the account, and information about other financial obligations for which the borrower is responsible. A mortgage statement may also include a history of payments from the date of the last statement that was issued.

Note

An annual mortgage statement is not the same as an amortization schedule, which breaks down how payments are applied to principal and interest over the life of a loan.

Mortgage statements can also be issued monthly as a periodic statement or provided to the borrower upon request. The information provided in the statement helps the borrower in taking the correct deductions on their tax return if they hope to deduct interest paid to the loan.

Annual mortgage statements are important disclosure documents for the buyer. They’re also key financial documents that contain sensitive information. Therefore, it’s important to verify their accuracy and store them securely. For example, borrowers should compare the annual statement with their records, then report any mistakes or oversights related to the statement, outstanding balance, or payment history to the lending institution right away so that a corrected statement can be issued, if necessary.

Borrowers should store mortgage statements safely and, if requesting clarifications for any of the calculations with their lender, they should request those clarifications in writing. Most financial institutions now make annual mortgage statements, along with monthly statements and other account information and updates, accessible so that customers can easily access them online and print them for their records.

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 via mail or email. Mortgage holders can double-check the numbers appearing on their statements by using mortgage calculators that can be easily found online.

Tip

An annual mortgage statement can be a helpful reminder that you may need to shop around for a refinance loan if you’d like to secure a lower interest rate or convert an adjustable-rate mortgage (ARM) to a fixed-rate loan.

Components of an Annual Mortgage Statement

In the United States, the annual mortgage statement is also known as the year-end statement or the mortgage interest statement. It is also referred to as Form 1098.

The Internal Revenue Service (IRS) requires a lender or other business to send an annual mortgage statement 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 to which they may be entitled. 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.

So what’s included on Form 1098? Key details about your mortgage loan, including:

  • The lender’s name and address
  • The lender’s tax ID number
  • The borrower’s name and address
  • The borrower’s tax ID number
  • Number of properties securing the mortgage
  • Mortgage interest paid by the borrower for the year
  • Outstanding mortgage principal
  • Mortgage origination date
  • Refund of overpaid interest
  • Mortgage insurance premiums
  • Points paid on the purchase of the residence
  • Mortgage acquisition date

If you plan on deducting mortgage interest on your taxes, you’ll need this form to do it. And it’s important to ensure that you’re entering your information correctly when you file your return to maximize your mortgage interest tax benefits.

Important

If you do not receive your annual mortgage statement, or if you do but it’s incorrect, reach out to your lender to request an updated Form 1098 document.

Annual Mortgage Statement Example

If you recently purchased a home, you may not yet be familiar with what an annual mortgage statement looks like. As you head into tax filing season, it’s important to be on the lookout for your Form 1098. Here’s what this form looks like before your mortgage lender adds the relevant information.

Form 1098
Form 1098.

Internal Revenue Service

What is an annual mortgage statement?

An annual mortgage statement is a yearly statement that includes important details about a mortgage loan. This includes amounts paid toward the principal, interest, and escrow as well as the most recent loan balance.

What is required on a mortgage statement?

In addition to listing information about your mortgage loan, such as the principal, interest and any fees or escrow withholdings, your statement should also include information about how to contact your mortgage lender, payment breakdowns, and any information regarding past-due payments if you’ve fallen behind.

Do I need mortgage statements for taxes?

You don’t need mortgage statements for tax purposes if you’re deducting interest to a home loan. Instead, you’ll file Form 1098: Mortgage Interest Statement when you file your return to show how much interest you paid on the loan for the year. Your mortgage company should issue Form 1098 to you each year.

Article Sources
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  1. Consumer Financial Protection Bureau. Ҥ 1026.41 Periodic Statements for Residential Mortgage Loans.

  2. Internal Revenue Service. “Instructions for Form 1098,” Page 1.

  3. Rocket Mortgage. “Mortgage Statements: What Are They and How Long Should You Keep Them?

  4. Internal Revenue Service. “Form 1098: Mortgage Interest Statement.”

  5. Chase. “The Ins and Outs of Mortgage Statements.”