Reading a reverse mortgage statement means working from the top down: the Unpaid Principal Balance tells you what you owe today, the transaction list shows how it got there this month, and the interest rate plus mortgage insurance premium tell you how fast it will keep growing. Unlike a conventional mortgage statement, every figure on the page moves in the same direction — up — because you make no required payments and interest, insurance, and fees are added to the balance each month.
Getting Into Your Statement
Most servicers offer a secure online portal where you sign in with your loan account number, username, and password. The account number is on your original closing documents and on prior correspondence. Paper statements are also available; FHA requires servicers to send them as a condition of the loan, even though reverse mortgages are technically exempt from the general federal periodic-statement rule that covers conventional mortgages.1eCFR. 12 CFR 1026.41 Periodic Statements for Residential Mortgage Loans
Before reading anything else, check that the name and property address on the statement match your records. A mismatch could be a clerical slip or a sign of trouble in your loan file. If something looks off, call the servicer at the number listed on their official website, not one that arrived in unsolicited mail or email.
The Two Numbers at the Top
The most important figure is usually in a highlighted box near the top: the Unpaid Principal Balance. That is everything you owe right now, rolled into one number. It includes the money you received at closing, every draw you have taken since, and every dollar of interest and insurance premiums that have been added to the loan over its life. Because there are no required monthly payments, it goes up every month.
Next to it, you will usually see the Current Principal Limit. This started as the total you were eligible to borrow at closing, and it grows over time at the same rate your balance grows. The gap between the two numbers is roughly your remaining borrowing capacity. When those numbers start converging, your available equity is shrinking faster than the limit is expanding.
One number you will never see on the statement is a balance capped by your home’s value. HECM loans are non-recourse, so you and your heirs will never owe more than the home is worth at sale. If the balance grows past the home’s market value, FHA mortgage insurance covers the shortfall, and heirs who want to keep the home can satisfy the loan by paying the lesser of the full balance or 95 percent of the current appraised value.2Government Publishing Office. Reverse Mortgages: A Discussion Guide Worth flagging for your family now.
The Transaction List
Below the summary is a line-by-line record of every financial event from the billing cycle. In a typical month you will see some combination of:
- Cash draws you requested, added to the balance
- Interest charged for the period
- The monthly slice of your annual FHA mortgage insurance premium
- A servicing fee, if your loan carries one as a separate charge
- Any voluntary payments you sent in, shown as credits
Each entry has a transaction date, letting you trace exactly how last month’s total became this month’s. A year-to-date section usually rolls up cumulative interest, cumulative MIP, and total disbursements since January, so you can see the annual picture without pulling twelve statements.
Give servicing fees a close look. Federal rules let servicers collect their compensation either as a flat monthly charge or as basis points folded into the interest rate on your note.3Federal Register. Federal Housing Administration (FHA): Strengthening the Home Equity Conversion Mortgage Program For loans with a flat fee, the cap has historically been $35 per month on adjustable-rate HECMs and $30 on fixed-rate loans. Many newer loans build the compensation into the margin instead, so the line item shows $0. If your statement does show a monthly servicing fee, compare it against the amount disclosed in your original loan documents. It should not be higher.
Interest Rate and How Fast Your Balance Grows
Interest is the biggest reason your balance climbs. Most HECMs carry a variable rate built from two pieces: a market index and a fixed margin. The two approved indices are the Constant Maturity Treasury (CMT) yield and the Secured Overnight Financing Rate (SOFR).4Federal Register. Adjustable Rate Mortgages: Transitioning From LIBOR to Alternate Indices Your statement should display the current index value, the margin, and the resulting interest rate so you can verify the arithmetic yourself.
Because the index moves, your rate can change monthly or annually depending on your loan terms. Half a percentage point compounds fast on a growing balance, so tracking the rate on each statement matters more than it would on a conventional loan where you are paying principal down. Any rate caps live in your loan documents rather than on the statement, but knowing them helps you gauge the worst case.
The Mortgage Insurance Premium Line
Every HECM statement carries a separate line for the FHA mortgage insurance premium. At closing you paid an initial MIP of 2 percent of the maximum claim amount. After that, an ongoing annual MIP of 0.50 percent of your outstanding balance accrues daily and is added to your loan each month.5eCFR. 24 CFR 206.105 Amount of MIP On a $200,000 balance, that is roughly $83 per month tacked onto the debt.
The regulation actually permits FHA to charge up to 1.50 percent annually, so the current 0.50 percent is a policy choice rather than a permanent guarantee.5eCFR. 24 CFR 206.105 Amount of MIP This insurance is what funds the non-recourse protection and the line-of-credit growth feature. Together, your interest rate and the 0.50 percent MIP form what is sometimes called the effective rate: the true speed at which your balance grows. When the monthly increase on your statement looks larger than the interest charge alone, the MIP is why.
Available Credit If You Have a Line
If you took the line-of-credit payment option, your statement will show how much you can still draw, usually labeled Net Principal Limit or Remaining Line of Credit. Unlike a traditional home equity line where the credit limit is fixed, a HECM credit line grows at the same effective rate that applies to the balance.
The growth rate on unused credit equals the interest rate plus the annual MIP. At a 6.5 percent interest rate and 0.50 percent MIP, your available credit grows at 7 percent annually, in monthly increments. The less you borrow, the faster your available funds expand.
A voluntary repayment restores borrowing capacity. Money you send in reduces the balance and shifts back to the available-credit side, where it resumes growing at the effective rate. Your statement will reflect that shift in the month following the payment.
Property Tax and Insurance Set-Asides
Your statement may include a line for a Life Expectancy Set-Aside, or LESA. For loans closed after April 2015, lenders evaluate whether you can reliably pay property taxes and homeowners insurance on your own. If not, a portion of your principal limit is set aside to cover those charges.6eCFR. 24 CFR Part 206 Subpart B – Eligibility; Endorsement
With a fully funded LESA, the servicer pays your taxes and insurance directly from the set-aside. A partially funded LESA leaves some of that responsibility with you. Either way, the statement should show the remaining set-aside balance. Watch it. When it runs out, you become responsible for those charges yourself, and falling behind on property taxes or insurance can push the loan into default.7HUD Exchange. HUD Housing Counseling Guidelines for HECM Borrowers with Delinquent Property Charges
Even without a LESA, you are still obligated to keep taxes current and insurance in force. The statement will not always flag this, so track it separately.
What Can Make the Loan Due
Your statement is a snapshot of a loan that will eventually come due. Federal rules list several events that trigger repayment of the full balance:8eCFR. 24 CFR 206.27 Mortgage Provisions
- Death of the last surviving borrower, unless an eligible non-borrowing spouse qualifies for a deferral
- Selling or transferring title with no other borrower remaining on the deed
- The home no longer being your principal residence, including absence of more than 12 consecutive months for illness
- Delinquent property taxes, lapsed insurance, or unpaid HOA fees
- Letting the property fall into disrepair or otherwise breaching the mortgage terms
Your servicer will send an annual occupancy certification asking you to confirm the home is still your primary residence.9U.S. Department of Housing and Urban Development. What Are the Ongoing Requirements for HECM Borrower and Non-Borrowing Spouse Certifications Return it promptly. Failing to do so can start a process that leads to the loan being called due.
When a borrower dies, the servicer must send a Due and Payable Notice to the estate or heirs within 30 days of notifying FHA.10HUD.gov. Mortgagee Letter 2022-15 Update to HECM Program Requirements for Notice of Due and Payable Status Heirs can then pay off the loan, sell the property, or provide a deed in lieu of foreclosure.
Disputing a Charge That Looks Wrong
If something on your statement looks wrong, federal law gives you a formal way to challenge it. Send the servicer a written notice of error. The servicer must acknowledge receipt within five business days, and generally has 30 business days to investigate and either correct the error or explain in writing why no error occurred.11Consumer Financial Protection Bureau. 12 CFR 1024.35 Error Resolution Procedures The servicer can extend that window by 15 business days by notifying you in writing before the original deadline expires.
Send your notice to the specific address the servicer designates for error disputes, not the general payment address. If you send it to the wrong place, the clock may not start. Keep a copy and send by certified mail. You can also submit a separate written request for information about your account under a parallel regulation with its own five-day acknowledgment and 30-day response window.12eCFR. 12 CFR 1024.36 Requests for Information
Errors worth flagging include interest calculated at a rate different from what your loan documents specify, duplicate servicing fees, MIP charges that do not match 0.50 percent of your outstanding balance, and disbursements you did not request. Catching these early keeps your balance from compounding on top of a mistake.