Unveil the secrets within your mortgage documents and ensure you keep them safe until your loan is paid off. It is advisable to retain essential documents such as proof of title insurance and the promissory note for future reference. Having your mortgage paperwork readily available can be advantageous for tasks like filing home insurance claims, calculating capital gains tax, or undertaking home improvement projects. In the event of losing or damaging your original documents, your mortgage lender or local recorder’s office can typically provide replacement copies.
Most homebuyers acquire a mortgage to finance their home purchase, resulting in a substantial amount of paperwork, documents, and monthly payment statements. While all these documents are vital, some are more crucial to retain. Here is a guide on how long to keep mortgage statements and other pertinent home-related paperwork.
How long to retain mortgage statements
Monthly mortgage statements can be discarded as you receive a new one each month. You may choose to keep one for providing mortgage details or proof of address if needed. Additional documents like agent agreements or tax-related addendums can generally be disposed of after six years to align with the IRS auditing statute of limitations. Home inspection reports can be discarded after six months, although keeping them might help prove your home’s condition at the time of purchase.
Crucial mortgage documents to retain
Key documents such as the mortgage note and deed are recommended to be kept until your loan is fully repaid or until you sell your home.
Information included in mortgage statements
Your mortgage statements contain significant information such as upcoming payment details, loan and account specifics, transaction history, past payment breakdown, and contact information for your lender.
Other essential homeownership documents
Apart from mortgage statements, there are other essential documents you may receive when purchasing a home, including the buyer’s agent agreement that outlines the services provided by your real estate agent.
Seller Disclosure: This document outlines any issues with the property known to the seller that could affect the safety or value of the home, such as the presence of lead paint.
Home Inspection Report: Prepared by a professional inspector, this detailed report describes the home’s condition, highlighting potential hazards or problems requiring attention.
Title Insurance Document: Received from the settlement or title company, this document includes details about your title insurance policy, which protects the lender and, if chosen, yourself from property ownership issues.
Promissory Note: Also known as a mortgage note, this legal contract with your lender signifies your promise to repay the loan with interest, using the home as collateral.
Closing Disclosure: Provided at least three days before closing, this document breaks down the final loan terms and property sale details, including loan amount, duration, interest rate, and escrow fees.
Purchase Agreement: Signed by both buyer and seller at closing, this document outlines the home’s purchase price, closing date, and other transaction specifics. It may also include addendums detailing additional terms.
Deed: A legal document signed by the buyer and seller during closing, the deed transfers ownership of the property from one party to another.
Home Warranty: While not mandatory, a home warranty is a service agreement covering major systems and appliances. It typically includes coverage for items not protected by homeowners insurance, such as wear and tear damage.
Essential Mortgage Documents to Retain:
– Deed
– Purchase Agreement
– Seller’s Disclosures
– Closing Documents
– Home Inspection Report
– Home Warranty
– Property Survey
Importance of Keeping Mortgage Documents:
Retaining mortgage documents is crucial due to the significant investment involved in buying a home. These records can provide answers to questions regarding title, insurance, or taxes. They may also prevent disputes during future property sales by confirming loan satisfaction with the recording office. In case of foreclosure or title challenges, having these documents on hand is essential.
To verify your ownership of the property, it is essential to provide evidence such as mortgage documents for calculating capital gains tax liability or for planning a major remodeling project, having a home inspection report and seller’s disclosure can be helpful.
When it comes to securely storing mortgage paperwork, there are several options to consider. The best place to keep original mortgage documents is in a fireproof and waterproof safe at home. Alternatively, if you prefer not to store them at home, a safe deposit box at your local bank can also be a secure option. Additionally, maintaining digital copies of your mortgage documents in cloud-based storage or on a hard drive is a wise practice.
In case your mortgage documents are lost or damaged, you can typically obtain replacements from companies involved in real estate transactions such as lenders or title companies, as they often keep such paperwork on file. If necessary, you can request physical copies of specific documents from the relevant company or your local recorder’s office.
Addressing commonly asked questions about maintaining mortgage documents, it is recommended to keep mortgage statements for at least three years following the death of a loved one, storing them securely in a fireproof safe or safe deposit box. After selling a home, it is advisable to retain mortgage documents and related home sale records for a minimum of seven years, encompassing proof of mortgage payoff, closing statements, and receipts for capital improvements. Similarly, if you refinance your home, it is prudent to retain the associated documents for a minimum of three years, with the option of extending this period to up to 10 years to account for potential statement errors or unforeseen changes in interest rates or payments.
