Even if you don`t sign a mortgage, there are documents you should keep until they`re no longer needed: it`s important to know where to keep your key records. For example, online or cloud-based records can be hacked and hard drives can fail. Storing paper files in a locked fireproof cabinet or locker helps keep papers safe. Just be sure to remember where you kept the documents and that you tell yourself to the other named party in your home loan where they can find such documents. You only have to keep monthly statements, such as those that list monthly mortgage fees, for as long as you feel it`s necessary – maybe a few months – to make sure the payments have been credited to your account. A: Good question. Today, financial institutions such as mortgage companies are distributing more documents electronically. So if you have a folder with these documents on your computer, we don`t think you need to keep the physical documents. Today, most (if not all) of these documents are delivered to you electronically, and if you have physical documents left from a long time ago, you can also scan them into your computer. Settlement (Closing) Statement As a seller, your most important document is the closing statement, also known as the settlement statement.
(Some agents also refer to this as “ALTA” because the American Land Title Association developed the widely used form.) This statement, often used with the closing statement, summarizes the finances of the transaction, lists fees and credits, and displays a seller`s net profit that you might need for taxes. As the company becomes paperless, it`s hard to remember to keep all the documents that come with your home, especially if you`re selling your home. Imagine: Some real estate transactions require about 180 sheets of paper, creating a considerable pile, plus cramps in the hands of all signatures. While you`re busy throwing papers into the campfire, don`t forget to keep your HUD-1 return. This is a detailed list of all the costs associated with buying your current home and includes tax-deductible items and costs that can be added to your cost bases when you calculate capital gains tax on sale. Even if the technology is getting closer to a paperless society, some original printed documents need to be kept, including home loan documents. When it comes to keeping mortgage papers, applying the “better to prevent than to abstain” philosophy can lead to piles of paper, especially if you own multiple properties or have refinanced them several times. Knowing what to store and what to throw away will help break the mess. It`s also wise to keep the promissory note and final disclosure, according to Merrill.
It may be a good idea to also stick to supporting documents regarding the house. Why you should keep it: Presenting a title deed is the only way to show someone that you legally own the home you live in. Since the deed is sent directly to you, neither your mortgage lender nor your securities company needs to keep a copy. Let`s say you`ve paid off your mortgage and you`re ready to sell your home. If your mortgage lender has never applied for a mortgage with the local record keeping office, your mortgage documents may prevent you from having a dispute during the sale. Aside from what you need for your taxes (we`ll get to that shortly), you don`t have to keep all the documents associated with a property indefinitely once you no longer own it. If you decide to throw away any of these documents – and you shouldn`t do so until the house is sold out at the earliest – don`t just throw them in the trash. For example, if both parties have signed a repair addendum where the seller has agreed to make certain repairs based on the home inspection, you will need that addendum if you find problems with the repairs on the street. Cloud storage such as Dropbox, IDrive, pCloud, MediaFire, OneDrive, Google Drive, and iCloud are automatically backed up and password protected, so a computer crash at home won`t affect your recordings. You can also access cloud storage from anywhere in the world. Just make sure that everyone who needs access to these records has the right connection. However, you should definitely keep proof of loans, mortgages (also known as trust deeds) and deeds on your behalf that have been repaid and registered in the land registries of the state or county where the property was sold.
Ideally, you should keep the original paper mortgage documents in a fireproof and waterproof safe in your home or in a safe at your bank. At the very least, store paper documents in a carefully organized filing cabinet that you can lock. Q: I bought a house and got a line of credit for homes a few years later. I re-promised the house several times along the way. For each of these transactions, I received a file of documents related to each loan and I probably have a few hundred pages of notices, supplements and other documents. If you`re not a fan of keeping old documents for years, you may also want to consider digitizing some of them.
