Annual Mortgage Statement

A mortgage takes place over a long time. If you buy a house, the typical mortgage (the loan you get to buy the house) runs either 15 or 30 years. Often times, borrowers will refinance the mortgage at some point during the process, which can reset the clock.

Bottom line: when you borrow to buy a house, you might be starting a multi-decade relationship with a lender. Annual mortgage statements are the love notes of that long-term relationship. Each year, the lender will send you a document that will outline how much interest and points you paid during the year, and detail how much principal remains on the mortgage.

This may seem straightforward, but the structure of a mortgage can get complicated. Even a vanilla fixed-rate mortgage is more complicated than many borrowers realize, with the ratio of interest to principal being paid changing from year to year (in the beginning, you pay more interest; by the end, you're paying mostly principal).

The goal of the annual mortgage statement is to keep everyone on the same page.