What to check on your own statement

Six figures, pulled from documents you already have, reconstruct the position the lender sees.

This closing lesson is a checklist, not a conclusion. Everything on it is a fact about your own facility, findable in your agreement and your statement, and none of it requires a professional to look up.

The six figures that define your position:

The maintenance threshold, and whether it is written against market value or lending value. Without the basis, the threshold is unusable.
Your current advance rates by holding, and any concentration rule. These give you lending value.
Your balance including accrued interest, not the principal you remember drawing.
The rate, decomposed into index and spread, plus the reset frequency.
The day-count convention: 360, 365 or 30/360.
The notice and cure provisions, and whether a no-notice right sits alongside them.

From those six you can compute the three numbers that describe your risk: LTV, headroom in percent, and the forced-sale multiple. All three are arithmetic. None of them appear on a typical statement.

Then check the things that change without a signature. Compare this statement's rate to last statement's. Compare this statement's advance rates to the ones you were quoted at origination. Look for a prior-period adjustment line. Look for whether the statement states a collateral lending value at all, and note the answer, because its absence is itself information.

Take the risk you can measure. Not the smaller risk, not the safer risk — the measured one. Everything in this track was in service of being able to state your own numbers.

Key terms

Reconstruction: Rebuilding the lender's view from your own documents: lending value, balance with accrued interest, and the threshold on its stated basis.
Prior-period adjustment: A statement line correcting an earlier period, often the visible trace of a term that was revised after the fact.
Monitoring cadence: How often you recompute your own numbers. Frequency matters more than precision, because the threshold test runs continuously.

Worked example

A full reconstruction in six lines

Statement: market value $742,000; principal $310,000; accrued interest $1,780; rate 7.10%. Agreement: threshold 70% of lending value; advance rates 65% equity / 80% bond fund; holdings 80% equity, 20% bond fund; Act/360.

Blended advance rate: 68.0%
Lending value: $504,560
Balance: $311,780
LTV on the stated basis: 61.8%
Headroom: 11.7%
Forced-sale multiple: 3.33×

Six inputs, three answers, ten minutes. The statement alone said none of it — and the 61.8% LTV would have read as 42.0% if computed against market value.

Check yourself

You have your statement and your agreement. What is the first thing to establish before computing LTV, and why does it come first?

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Educational only. Nothing in this lesson is investment, legal or tax advice, or a recommendation to enter into any transaction. Figures are illustrative and computed from the inputs stated in the lesson.