Tuesday, May 21, 2024

Can I Throw Away Old Mortgage Papers

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Deface And Cut Up Old Cards

FINANCIAL DOCUMENTS: WHAT TO TOSS, WHAT TO KEEP

It’s not enough to cut up your old debit and credit cards. “Credit cards should always be cut up into many pieces and those pieces should be disposed of in separate trash containers,” says Guild. “Ensure the credit card number itself is cut and that any pertinent information such as expiration and name is unable to be read.”

Another simple way to eliminate the value of your discarded documents is to cover the important information. Take a black permanent marker and color over your name, address, account information and anything that you don’t want to fall into the wrong hands.

What Documents Should I Keep After Buying A House

Closing documents: Retain a copy of any document signed during your homes closing as a backup. This may include the purchase agreement, addendums, disclosures and repair requests, escrow information, inspection reports, and a closing statement.

Calculating Capital Gains Tax

You may be responsible for the capital gains tax if you sell your home. This is money you pay when you sell an asset for more than the amount you bought it for. You can add the cost of any improvements you make on your home to the original purchase price of the property. This increases the amount you paid for your home and also lowers the difference between your purchase and sale price. This decreases your capital gains tax liability.

Keep documentation of any repairs, additions or renovations you make on your home to help calculate your capital gains tax dues. This paperwork can also come in handy if youre ever audited.

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Store Permanently: Tax Returns Major Financial Records

Your tax returns are important documents to keep as part of your financial history. Youll want to keep a permanent electronic or hard copy of each years tax return and any payments you make to the government. Additionally, its a good idea to hold on to records of major financial events, such as legal filings or inheritances. You can easily access your paperless statements and documents online and keep them safely stored there. Bank of America clients can easily manage paperless statements and documents using Mobile and Online banking.

What To Keep For One Year Or Less:

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Track daily and monthly account activity by saving receipts and pay stubs until you reconcile them with larger financial records, like your account statement or tax documents.

ATM receipt and deposit slips. Make sure your deposits and withdrawals match your monthly statement, then throw away.

Everyday receipts. After you see the purchase correctly reflected in your statement, throw it away.

Pay stubs. Save until you reconcile them with your tax documents. If you plan to apply for a large loan, consider keeping a few months of recent pay stubs to document your current income.

Utility bills. When you receive the next bill showing the previous one as paid, throw it out.

Bank statements. Its a good idea to keep these for one year, unless the statement shows a tax-related expense, then keep it for tax time.

Monthly statements. You can usually discard monthly mortgage, credit card, or investment account statements at the end of the year after checking them against your year-end summaries.

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Shred Receipts Statements Bills And Old Mail

If you have a paper shredder, then take the time to shred the papers before you dispose of them. “Shredding is a great way to dispose of paper bank statements, financial documents, pre-approved credit offers or other documents that contain your personal information,” says Guild. “You should always secure your checkbook and other financial documents and information in a locked box at home, fireproof safe, or safety-deposit box. To be extra secure, you can separate the shredded pieces among different bags or bins of trash.” These documents include paper paycheck stubs, credit card receipts and statements, bills, and old legal documents they can be shredded once you’ve checked that your monthly statement matches the receipts and as soon as your payment clears.

You can also take your papers to a shredding service this usually comes at a cost. Visit the UPS, Office Depot, and other places if you have too many papers to use your home shredder or just don’t want to handle it yourself. “If you cannot access a shredder, secure the documents that you wish to shred in a locked box until you can shred them,” says Guild. “You can also hire a shredding service if you do not have the means to do this yourself. Your community may also have a shredding event.”

Why You Should Keep The Statements

Access to a record of your recent purchases, bill payments, and payroll deposits is necessary for a number of reasons, not least as a proof of payment in case of a dispute.

You should review your bank account activity regularly for evidence of identity theft and debit card fraud. The statements provide verification of illicit activity and are used to recover any damages.

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Properly Dispose Of Paper Documents

Youll put yourself at risk of fraud or identity theft if you simply throw away a large pile of private documents, such as financial statements. Invest in a cross-cut shredder that will eliminate all traces of your personal information, or search for free shredding events in your community. Having paperless statements and documents can help reduce the risk of identity theft posed by lost or stolen mail.

Which Mortgage Documents Should You Keep

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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.

Its 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, theres 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.

Read Also: How To Apply For A Home Mortgage

Time For The Research

Because I am who I am, and Ive been taught to keep everything, I wasnt just going to start KonMari Style and throw everything away. Since I was unsure about what papers to keep and for how long, I did some research.

Throwing out anything legally necessary in my purging process would not be in anyones best interest.

So I consulted blogs from Suze Orman to Dave Ramsey, to name a few. Also, the Internal Revenue Service has quite a bit to say that is very helpful.

Subsequently, I have compiled a list for you so that you dont have to do any of the leg work!

Check out the checklist at the bottom of this post.

But before you finish reading, dont forget to sign up for the freebie that will help destroy your paper clutter!

What Financial Records And Paperwork Can You Throw Away

There are some documents you can toss. As a rule, once a document has been replaced by a newer version, its safe to dispose of the older copy. And lets face it, do you really need that electricity bill from your old house back in 2014?

Theres also no need to hang on to credit card receipts once youve reconciled them against your bank statements, unless theyre needed for warranties. You should probably keep hold of credit card and bank statements for a year but you can throw away other household paperwork like utility bills.

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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.

Lets say youve 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, DAnnucci 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, DAnnucci says.

The lesson here?

Keep everything, DAnnucci says. You never know what challenges you may face in the future that your carefully preserved paperwork can help resolve.

At A High Level Make Sure Youve Got Proof Of Any Mortgage Payoffs

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Aside from what youll need for your taxes , you dont have to hold on to every record associated with a property indefinitely once you no longer own it.

However, youll definitely want to keep proof of any loans, mortgages , and deeds in your name that have been paid off and recorded among the land records in the state or county where the property was sold.

A release or certificate of satisfaction, indicating that the paid mortgage was recorded properly, will suffice.

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A Rundown Of What To Toss And What To Treasure

Stashes of old, paid bills, expired life insurance policies, receipts for broken gadgets, and canceled checks for haircuts you got in college — sound like your filing system?

I confess: It’s a pretty accurate description of mine before I spent a recent Saturday going through the “stuff to sort through” box . It was long overdue: In addition to being a fire hazard, the blizzard of paper buried the important papers I’ll need to file my taxes, not to mention a few flattering photos of me on a particularly good hair day.

“Grab the shovel, honey! It’s time to find the filing cabinet!”Crank the tunes, grab a few trash bags and a paper shredder, and have plenty of caffeine handy: It’s time to clear the clutter. Here’s a basic rundown of what to toss and what to treasure — and for how long. It’s not an all-inclusive list, but it’s a good place to start:

Toss into the trash :

Keep temporarily

Keep long-term

Keep forever

  • Filed tax returns
  • Military records

Guard Your Financial Accounts

Use complex passwords to keep your account information safe. Make sure your username and password combination is different from the ones you use for personal email, online merchants and social media accounts. Protecting your computer with antivirus software is also a good idea. Bank of America clients can download IBM® Trusteer Rapport for an added layer of protection against online fraud.

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How Long To Keep Outdated Home Loan Papers

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Even as technology moves closer to a paperless society, some printed original documents must be kept, including home loan documents. When it comes to keeping home loan papers, employing the “better safe than sorry” philosophy may lead to piles of papers, especially if you own multiple properties or have refinanced several times. Knowing what to stash and what to trash will help cut through the clutter.

Tip

While you’re busy tossing papers into the bonfire, remember to keep your HUD-1 statement. This is an itemized list of all costs associated with the purchase of your current home and includes tax deductible items and costs that can be added to your cost bases when figuring capital gains tax when you sell.

Four Quick Steps To Organising Your Paperwork

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Congratulations! Youve finally taken a wrecking ball to the mountain of paperwork, the shredder bin is full and youre feeling pretty good. But youre only halfway there. You need to put a system in place to avoid creating yet another mountain.

Protect yourself

Financial documents can contain sensitive personal information so its not a good idea to simply throw them in the bin. Buying a shredder or using a document disposal company should keep your details safe against identity theft.

Go digital

Many companies are moving towards electronic statements to help you reduce your paperwork and give the environment a boost at the same time! You can also make electronic versions of your old documents with a scanning app such as CamScanner, Genius Scan or Scannable.

Think files and folders

Whether you choose to keep paper or electronic copies, its a good idea to have a filing system with physical or electronic folders and labels to remind you how long to keep them for. Record-keeping apps like Evernote or Sign-N-Send can help.

Back it up

Think about storing important documents in a fireproof safe or offsite in a safety deposit box. For extra security, you can back up online files on an external hard drive or a cloud-based solution.

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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 DAnnucci, 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, youll receive several important pieces of paper, including the:

The home inspection report, agents 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, its 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, theres no need to keep them for any prolonged period of time if you dont want to, says Than Merrill, CEO of FortuneBuilders, a real estate investor coaching firm.

How Long Should You Keep Your Mortgage Documents

The amount of time that you want to retain your mortgage documents depends on the item.

You should keep monthly statements for the shortest amount of time. Because the information on these statements gets outdated quickly, you dont need to keep them for long. Hold onto them until you know that each of your payments is on record usually a few months. You may want to keep each one for a longer period of time if you notice a mistake on one of your statements. Rocket Mortgage® clients can access their statements online as well.

You should hold onto your Closing Disclosure, deed and promissory note as long as you have a mortgage loan. These documents tell you important information about your loan and property you may want to refer to them later. If you really want to get rid of your personal copy of your deed, make sure that you have a document labeled release or certificate of satisfaction. You can verify this with your title insurance company.

There are some documents that you should keep indefinitely. Hang onto your purchase contract, records of any renovations you make on your home and your home inspection. These contain important information on your propertys condition and can be invaluable when you sell your home or do maintenance. Keep your warranty until it expires.

Read Also: What Documents Are Needed To Get Pre Approved For Mortgage

Can I Recycle Shredded Paper

That depends. According to the City of Seattle’s website, confetti-like pieces from cross-cut shredders have no retrievable fibers for recycling. Cross-cut shredded paper can be added to yard waste carts or compost. Other sources indicate that shredded paper can be recycled if its bundled, so check with your waste service provider.

Here are some suggesting for re-using shredded paper: Substitute for tissue paper in gift bags or baskets, ship fragile items, line your hamster’s cage, add it to a worm composting bin, kids’ art projects, such as stuffing pillows or bean bags.

Some commercial shredders pulverize paper. Others cross-shred. Many commercial shredders transport the destroyed documents to a recycling center to be used as paper or other products. Check with individual companies per their procedures.

How Long To Keep Paperwork

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What to keep and what to bin

Keeping up with your financial paperwork and life admin might sound like a dull task but setting up an efficient system can save time and hassle in the long run. Heres what to keep and what to bin.

If your home filing system is bulging at the seams, it might be time for a declutter. Whether youre a serial hoarder who keeps everything or someone who bins the majority of official letters, doing your life admin like a pro can really pay off.

There’s no need to hoard utility bills for the past 10 years, here’s the lowdown on what you need to keep and for how long.

Firstly, make sure that you dispose of any sensitive paperwork properly. We like the Fellows Powershreder 79 Ci sheet crosscut paper shredder.

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