A mortgage involves a lot of paperwork, from the stack of documents you’ll get at closing to the statements you’ll continue to receive from your lender as you pay down your loan. How long should you keep these documents, and do you need to keep every single one? Here’s what to know.
How long you should keep mortgage documents?
Many experts advise holding onto mortgage documents for the life of your loan or beyond, or at least until you sell your home.
“Once you sell and there are no future tax implications associated with the sale of that property, your paperwork may be discarded,” says Roselina D’Annucci, a New York-based attorney with Serrano & Associates PC. “Even if you pay off your mortgage, it is a smart idea to keep the paperwork.”
When you buy a home, you’ll receive several important pieces of paper, including the:
- Deed – The deed indicates your ownership of the home and is signed by you and the seller, explains real estate investor Warner Quiroga, president and owner of Prestige Home Buyers in Brentwood, New York.
- Promissory note – Your mortgage contract, in which you promise to repay the debt you took on with interest.
- Purchase agreement or contract – Signed by both you and seller, this document typically includes the price paid, closing date and other essential details.
- Home inspection report – A detailed report from a professional home inspector with notes indicating your home’s condition, including possible issues.
- Closing disclosure – Provides details about the term, type, interest rate, closing costs and escrow items associated with your mortgage.
- Seller disclosure document – Spells out other details about the home that the seller is aware of, Quiroga says, such as any defects or hazards.
- Title insurance document – This document from the settlement or title company includes information about your title insurance policy, which protects the lender (and you, if you opt for this coverage) from issues with the property’s title.
- Addendum and amendments – These documents specify any alterations or changes not present in the original contract.
- Buyer’s agent agreement – The contract between you and the real estate agent who helped you find and negotiate the purchase of the home.
“The home inspection report, agent’s agreement and addendum documents can be discarded after as little as three years, since the statute of limitation for IRS auditing is up to that time,” Quiroga says. Everything else, it’s best to hang onto for the life of your mortgage.
Once you begin making monthly mortgage payments, you might also receive mortgage statements by mail from your lender or servicer. They specify your unpaid balance, interest paid, projected payoff date and other details. These statements have a very short shelf life, so can be destroyed or shredded whenever you choose.
“Since the information contained on monthly statements is always changing, there’s no need to keep them for any prolonged period of time if you don’t want to,” says Than Merrill, CEO of FortuneBuilders, a real estate investor coaching firm.
Which mortgage documents should you keep?
The most critical mortgage document to keep is the deed to your home.
“Above all, never throw away or remove the deed to your home, as this is by far the most important document to keep,” says Leonard Ang, CEO of iPropertyManagement, an online resource for landlords, tenants and real estate investors.
It’s also wise to keep the promissory note and closing disclosure, according to Merrill. It can be a good idea to hold onto supporting paperwork about the home, too.
“Documents that are worth keeping include the home inspection report, purchase contract and any renovation records,” Merrill says. “While they may not sound necessary to keep it first, there’s always the chance they will come in handy in the future. Therefore, a homeowner should indefinitely hold onto any documents that detail the state of the home.”
Why do you need to keep mortgage documents?
If a title, insurance, tax or legal question arises, your mortgage paperwork can prove invaluable.
“For instance, your homeowners insurance agent may request some of this paperwork, particularly if there is an insurance claim involved,” Ang says.
Let’s say you’ve paid off your mortgage and are ready to sell your home. If your mortgage lender never filed a satisfaction of mortgage with the local recording office, your mortgage documents could save you from a dispute during the sale.
“The easy fix is to hand over the document that you saved, pertaining to your payoff, whether it is a letter acknowledging payoff or the payoff itself,” D’Annucci says.
Most crucially, you might need these documents if you ever face foreclosure.
“The majority of my clients facing foreclosure did not keep their original documents, which may be used as a defense that could possibly win your case and, in some cases, wipe out the mortgage itself due to errors or non-compliance of certain laws and regulations,” D’Annucci says.
The lesson here?
“Keep everything,” D’Annucci says. “You never know what challenges you may face in the future that your carefully preserved paperwork can help resolve.”
How to safely store or destroy mortgage documents
Ideally, you should store original paper mortgage documents within a fireproof and waterproof safe in your home or in a safe deposit box at your bank. At the very least, store paper documents in a carefully organized file cabinet that you can lock.
“Try to organize your papers in a binder or folder,” Ang says. “Chronological order may be most helpful, with indicator tabs showing the month and year.”
It might also make sense to keep a digital copy of your mortgage documents in cloud-based storage or on a hard drive.
“Just be aware that a hard drive can be lost, and cloud-based storage can be hacked,” Quiroga says. “Plus, digital copies can be altered. That’s why holding onto the original paperwork is wise.”
If you decide to discard any of these documents — and you shouldn’t until you sell the home, at the earliest — don’t simply throw them away in the trash.
“All sensitive content should first be removed before discarding, including your account numbers, Social Security number and date of birth that can be redacted by using a redaction pen or stamp,” D’Annucci says.
After that, you can either thoroughly shred or completely burn the paperwork, provided no remnants remain.
Lastly, if you’ve lost or damaged any original mortgage documents, don’t despair.
“You may be able to request a duplicate document from your lending institution,” Quiroga says. “For lost deeds, you can contact your local recorder’s office and request a copy.”