Mortgage Documents Homeowners Need to Keep
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Buying a home comes with a lot of paperwork, especially when getting a home loan. It’s important to know what needs to be kept safe and what doesn’t need to be worried about. Let’s talk about the items you should keep track of after closing on your home.
The Deed of Trust to Your Home
While this one seems pretty obvious, it’s always a good reminder! Your mortgage deed of trust will become part of public record in the county you live in but having a copy of it is important. As with all significant paperwork, keep the deed locked in a fireproof safe that only you and trusted people have access to, or make sure you have a digital version saved securely.
If you’re wondering why you would need the deed to your home, the biggest reason is that it will be necessary if you decide to sell later on. It also makes life easier in case there are any insurance issues or potential neighbor/land disputes.
Homeowners Insurance Policy
While many insurance companies now offer apps that show proof of insurance, having a hard copy on hand can be helpful. This way you can verify your coverage and premium and refer to any changes you’ve made to your policies throughout the years. Your declaration page will show who’s on your insurance policy as well as your mortgage lender, and the name of the insurance company. This is necessary to have because your mortgage company will want an updated policy yearly.
Title Insurance Policy
If buying your home with a loan, title insurance is mandatory. This helps protect you as a homeowner in case there are any claims on your new house from a third party. Make sure you add the policy paperwork into your files.
When you bought your home, you likely had an appraisal done to ensure the value. Your lender requires this, and it gives you an unbiased opinion of how much your home is worth. Your appraisal report also comes into play for any issues that may arise such as a divorce or a tax settlement. If you refinance your home, you’ll likely want to have a new appraisal done to see the appreciation compared to your original appraisal.
Once you’ve found a home you want to purchase, your Home Loan Specialist will draw up a breakdown of your mortgage. This will show you the terms and conditions as well as the costs associated with buying. This includes your projected monthly payment and closing costs. However, this is only an initial estimate. The estimate can change before and after closing based on the type of loan you’re getting. You can compare different lenders through loan estimates and can keep to compare to your closing disclosure.
A closing disclosure is given to you when you’re clear to close. This five-page document will help you understand the terms of your loan. It also shows how your actual loan compares to your most recent loan estimate, which we discussed above. Don’t be afraid to ask your Home Loan Specialist to go over any details that seem confusing. It’s imperative you understand your mortgage terms and conditions before buying a home. Keeping this document will also help you if you choose to refinance later on, as you’ll be able to see the differences in your old and new loan easily.
This paperwork can confuse people because there are actually two separate notes. The first is your mortgage note which is given out in states that don’t use deeds of trust. It will lay out your ownership of the property and the terms of your loan. The second note is a promissory note, which is the written agreement you and the mortgage lender (like Churchill Mortgage) sign to ensure monthly payments are set up and you know when those payments are due.
These are the major documents to keep from a mortgage perspective, but there are other documents you may find helpful to have on hand. Here are some examples:
- Home inspector findings
- Escrow paperwork
- Pest inspection
- Buyer’s agent agreement
- Purchase agreement
- Home warranty documents
- Seller disclosures
Not everyone loves the paperwork that comes with buying a home, and many opt to close electronically (or do a hybrid combination of these two options). A hybrid closing is where you sign some documents online and some in person, or you may do everything virtually. These options tend to help since there’s more flexibility with scheduling. It’s always best to discuss all of your options with your Home Loan Specialist before deciding what type of closing you want to have.
At Churchill Mortgage, we pride ourselves on doing what’s right for you. Whether that means an eClosing, sitting down to go over your closing disclosure, or just helping you find ways to budget for your new home, we want to help you achieve the dream of homeownership. That’s why we provide a smarter mortgage plan that allows you to build long-term, lasting wealth.