WHAT PAPERWORK DO I NEED TO KEEP AFTER MY HOME CLOSING
What paperwork do I need to keep? I had an email yesterday from a long time repeat customer who asked this question. Over the last decade or more I have helped them with a purchase, a refinance and another purchase. Like a lot of folks when they moved again they packed up all those closing files and moved them to the new home.
When you are buying a new home or if you refinance the old one do keep:
- The NOTE from the file. This is usually a 8.5" x 11" form, up to about 4 pages. If you have a second mortgage position on the home, however, that may be a 8.5" x 14" form that can be up to 5 pages and called a variety of things, equity line agreement, etc. In any case the NOTE spells out the loan amount, interest rate, terms for repayment and, with variable rates how and when rates can change.
- The Mortgage - The mortgage for a first mortgage is 13 to 18 pages these days. It will say Mortgage on it.
- The HUD1 settlement sheet, soon to be called a closing disclosure. This is where all parties signed on the agreed price, costs, etc.
- The letter from the lender releasing your liability for the mortgage paid off.
Keep the above items when you buy, when you sell and when you refinance.
You want to keep these things for a number of reasons. One reason is that the lender most often will notify the court house to release the lien against the property. (Sometimes they will ask you to take that release to the court house.) I had one instance where the borrower had 10 liens show up on his property because he had refinanced an equity line that many times (same lender). The lender did not release the old liens when they refinanced. Having release letters would have been helpful since the lender said they had no record of those liens but would take six weeks to investigate.
The NOTE comes in handy when you go to refinance your home. You have to have a valid reason to refinance so underwriters use this to prove what payment. All these documents reflect information that can be useful down the road.
So, pare down your old closing files, throw away the old applications and disclosures, but KEEP IMPORTANT DOCUMENTS NOTED ABOVE!