It is sometimes frustrating to hold onto paperwork related to bills and personal accounts. It clutters the home and office and makes it difficult to maintain organization. But you may need to keep some items, like paperwork related to a mortgage, handy for a while. Learn rules of thumb when it comes to keeping and disposing of mortgage papers.
Types of Mortgage Papers
When you close a mortgage, the lending official provides you with a stack of papers in regards to the loan. The paperwork is your signed copy of all closing documents that prove the loan's existence, including the mortgage agreement, title paperwork and details of any required mortgage insurance. Besides the closing documents, you may also have printed monthly bills that you receive regularly. The lender also sends a 1098 form to the borrower each year for tax purposes.
Why Hold Onto These Papers?
A number of situations may arise where you'll need to refer to the paperwork related to your mortgage. For instance, if you're unsure of how the lender will handle certain circumstances regarding the mortgage or you need to double-check terms, you need to pull out the mortgage agreement. If it is a variable rate mortgage loan, you need those closing documents to understand when and how the rates change. In most cases, you only need to keep monthly bills for reference purposes temporarily. Finally, you need 1098 tax documents from the mortgage lender to fill out tax forms properly and also to keep on hand for long-term reference purposes.
When to Discard
Keep mortgage bills for up to a year; then dispose of them. If the same information is available online, it may be unnecessary to keep the billing statement after you've finished paying the bill that month. Keep any printed payment receipts as proof until the payment shows up on the mortgage statement. You should keep the mortgage agreement and related official paperwork for as long as you have the loan. Keep 1098 tax forms for at least three years after filing.
Organizational Tips
Mortgage paperwork commonly contains very sensitive and private information like account numbers and even Social Security numbers. Shred this paperwork when it is time to do so. Develop an organizational system where you can store the paperwork in a file cabinet or bin for quick access. Transfer the paperwork to a shred bin when it is no longer needed, and set a day to shred all paper and empty the box.
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