A mortgage statement is a document provided by a homeowner’s current mortgage provider to the homeowner detailing the current financial standing of the mortgage, including its outstanding balance, interest rate, time remaining in the term and other important financial information. This document is typically required in a switch or refinance transaction to show the outstanding balance of the existing mortgage. While the mortgage statement may be several weeks or months old, it can be used to calculate the current balance at the date of the application by using the outstanding balance at the date of the statement. This is vital to determine the exact amount of principal that must be repaid to the current lender on closing.
While it is important to provide a mortgage statement for the lender to calculate the current outstanding balance of the applicant’s mortgage, this document is not used by the new lender to determine the amount required to pay off the mortgage. The new lender will request a statement directly from the current lender before closing, to ensure that the information is accurate and that there are no arrears on the current mortgage.