How Long Should You Keep Your Mortgage Docs?

A lot of people are decluttering their homes these days. They’re clearing out closets, garages, and throwing out old paperwork they no longer need. It’s a smart move, especially if you have time on your hands.

However, it’s crucial to be cautious when disposing of old documents, particularly those related to mortgages. While you don’t need to keep every piece of paperwork forever, there are some documents you’ll need to retain for future reference.

Which documents should you keep, and which ones can you discard? Let’s explore.

Mortgage documents you should keep indefinitely:

• Closing statement. This is particularly important if you’ve claimed any home-related deductions on your tax returns. (Mortgage interest, points, and other costs are deductible in many cases). The IRS can audit you at any time, and proof of these expenses will be required.
• Deed. This is your proof of ownership, so keep this one on hand until you’ve sold the home.
• Survey. This can protect you in case boundary disputes crop up down the line.
• Purchase agreement. Signed by both you and seller, this document typically includes the price paid for the home, closing date and other important details, such as a parking spot(s) in the case of a high-rise condominium.
• Addendum and amendments. These specify any changes not included in the original purchase and sale agreement. In some cases, the sellers could be held liable if they didn’t disclose a known issue.
• Title insurance. This document from the settlement or title company includes information about your title insurance policy, which protects the lender (and if you opt in, yourself) from issues with the property’s title.
• Payoff statements. If you pay off your loan at any point, you’ll want to keep the final payoff statement on hand. This can protect you in case there’s an issue with your credit report.

Documents you may be able to throw away:

• Home warranties. If the warranty has expired, you no longer need the documents.
• Monthly mortgage bills. You might want to keep the most recent one on hand, but as long as you’re current on your loan payments, you can toss (ideally, shred) the rest.
• Property tax statements. You should keep the last year or two of these, but since they’re public record, you can always pull them up through your county’s assessor’s office if necessary.
• Documents for homes you sold or loans on previous houses. Once you sell the house and have reported your capital gains on the sale, you’re probably safe throwing them away or, at the very least, just keeping your final closing documents.

Tip: If you are going to throw away any of these documents, remember they contain sensitive personal information, so may want to use a shredder before placing them in the trash.

What if I accidentally destroy docs I should keep?

If you accidentally discard mortgage documents that you should keep indefinitely, such as your closing statement, deed, or survey, there are a few steps you can take:

• Contact your lender or title company: Reach out to the institution that handled your mortgage closing. They may have copies of the documents on file that they can provide to you.
• Check with your county recorder’s office: Your deed and other property records are typically filed with your local county recorder or assessor’s office. They may be able to provide you with copies of the documents.
• Obtain a copy of your title insurance policy: If you purchased title insurance when you bought your home, contact the title company. They should have copies of your deed and other relevant documents.
• Request a copy of your closing disclosure: If you can’t obtain your closing statement, request a copy of your closing disclosure from your lender. This document contains similar information about the fees and costs associated with your mortgage.
• Recreate the documents: If you can’t obtain copies from any of the above sources, you may need to recreate the documents to the best of your ability. This could involve obtaining copies of your home inspection report, seller disclosures, and any other relevant documents.

It’s important to act quickly if you realize you’ve discarded important mortgage documents. The sooner you begin the process of obtaining replacements, the easier it will be.

Additionally, be sure to store any replacement documents in a secure location, such as a fireproof safe or safe deposit box, to prevent future loss.

Consider going digital

If you’re not a fan of keeping old documents for years, you can also consider digitizing some. Scan the documents and store them in a safe, cloud-based folder (like Dropbox, for example) until you need them. This can help you declutter your physical space while still having access to important documents when necessary.

It’s always better to err on the side of caution when it comes to retaining important legal and financial documents. If you’re unsure about whether to keep or discard a document, it’s best to consult with a legal or financial professional for guidance.