Until we enter the age of the “paperless mortgage”, buying a home can include a mountain of paperwork. Much of the forms used are boilerplate forms and can be shredded after the close of escrow. But what are the most important documents to have handy?
You should keep a copy of your mortgage note. The note carries your terms for payment due dates, grace periods, and prepayment penalties. Keep your final settlement statement.You will find it useful when you file your taxes and when you sell your home. For example, the real estate taxes and loan origination points you paid as part of your closing costs are tax deductible. So, when you file your taxes, you will need to refer to your final settlement statement to get these amounts.
In addition to the note and settlement statement, you should keep all insurance records, such as homeowner’s and title insurance. You would need to have access to your homeowner’s policy if, for example, someone were to sue you because they were injured on your property. And you would refer to your title insurance policy if you were to find a flaw in the title after you bought the house.
It’s a good idea to keep these important records in a safe place. You may store them in a safety deposit box or on a flash drive kept off-site, in addition to keeping a copy of them in your home.
Companies other than the lender who originated and approved your loan will usually service the loan. Servicing includes the collection and processing of your monthly payments. You must be notified of the transfer by both your original lender and the new lender. Remember, never send your mortgage payment to a different party until you’re officially notified of the transfer by your lender.
Within two weeks of your first payment due date, your loan servicer sends you a mortgage statement. Keep your monthly mortgage statements until the end of the year, so you can reconcile your interest paid amount with the annual 1098 statement you receive for tax purposes.
Last, you should have a copy of your home’s appraisal. It may be used to answer questions about the actual square footage of your home, or about the condition of the home at acquisition.
Should you ever have questions about your loan, either contact the existing loan servicer or contact your local mortgage advisor for assistance. Writing a mortgage carries more responsibility than just seeing you through a successful closing.