Mortgage Statement Basics

September 19, 2009 | Posted by Staff

As the housing market continues to struggle amidst depressed prices and rising unemployment many home owners find themselves struggling to make regular payment on their homes. For many people the problem is twofold; just as home prices are experiencing a dip monthly payments are rising which can make it difficult to take out another loan.  If you find yourself falling behind in your home payments the first thing you should do is take a close look at your mortgage statement.

If you do not already you should keep a careful watch over your mortgage statement every month to ensure you are completely up to date and compliant with all mortgage payments and requirements. If you are not familiar with your mortgage statement there are some basic terms below. These terms describe the mortgage process and home loan agreements. If you encounter and terms or policies in your mortgage statement or agreement that you do not understand contact your lender for a thorough explanation.

Adjustable Rate Mortgage – a mortgage loan with a rate of interest that may change at some point and does not remain fixed. This loans often start with relatively low introductory rates before increasing in the future

Amortization – this is the process of paying off a debt or loan by making regular payments over a fixed time period, at the end of the amortization period the balance of the loan is zero

Balloon Mortgage – this is a loan agreement which requires a significant payment upon maturity

Collections – the attempts by mortgage lenders to collect monthly payments

Convertible ARM – this is an Adjustable Rate Mortgage that is able to be modified into a fixed rate mortgage loan during a specified period

Deed – this is an official document that implies property ownership for the holder

Deferred Payments – these are loan payments that the lender has permitted to be postponed, usually used during loan workouts to avoid foreclosure

Delinquency – this is the failure to pay a monthly mortgage payment within the specified time, usually 30 or more days past due

Equity – a measure of  ownership interest in a property

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