How Long Should You Keep Mortgage Statements?

Mortgage statements are important pieces of documents and should be dealt with accordingly.

A lot of times, while cleaning out, people tend to toss away essential documents that should be kept safely. One such document that is becoming a victim of the toss-away is the mortgage statements. Since these documents are bulky and often take up a lot of room in houses, owners try to get rid of them as soon as possible.

Keep reading to glimpse what a mortgage statement is, how long you should keep mortgage statements, and get a glimpse of a mortgage statement template.

What is A Mortgage Statement?

A mortgage statement is a document for the individual who opted for a mortgage. This document is prepared and given out to the person who signed up for the mortgage by the lender. Mortgage statements are issued to the borrowers every month, showing them their stats relating to the mortgage. It is also given to the borrower annually, accumulating all the year’s details.

 Image Source: Irish Examiner
Image Source: Irish Examiner

A mortgage statement consists of various information for the aid of the borrower. It outlines the different features that make up your mortgage amount, balance, loan payment history, significant points related to the loan, and any other finances the borrower has to cover. One can generally find a mortgage statement that is issued monthly.

On the other hand, an annual mortgage statement will provide the borrower with a summary of their total payments, essential information about the interest amount, and the remaining balance for the mortgage to be completed.

Why Is Mortgage Statement Important?

A mortgage statement is a crucial document as it helps in many ways. It is essential because, with the help of it, borrowers can easily have a proper system of documentation regarding their mortgage payments. It also helps them track and stay on top of their expenses. The updated statement issued every month is a great help for all those people who forget to complete their payments and end up getting their credit scores lowered.

 Image Source: Canva
Image Source: Canva

Furthermore, mortgage statements are legal documents and should be kept safe as they can help you in tricky situations. They can act as proof of your previous payments, and once the transactions are completed, the statement issued is helpful to avoid any trouble with your lender.

Also, monthly mortgage payments come with a delinquency notice for those who haven’t paid their dues in around 35-40 days. It is a great way to track your expenses and avoid any legal trouble that can go as far as losing your property.

How Long Should You Keep Mortgage Statements?

Since mortgage statements, when piled up, can take up a lot of room, the one question that keeps coming up is how long you should keep mortgage statements. There is no said date for how long you should keep them after the transaction is complete, but it is said to keep them safe with you for at least three years after the final payment.

If three years sound a lot to you, ensure you have a copy of your last annual mortgage statement when your payments are completed. If it is a dire situation, you can chuck out the earlier ones, but keeping a final copy for at least three years is recommended.

 Image Source: The Mortgage Reports
Image Source: The Mortgage Reports

It’s preferable to retain the mortgage statements with you until you sell the house if you intend to sell your home at some point in the future. When you put the house up for sale, you could need it. However, after 1-3 years of paying off your mortgage, you can throw away your monthly mortgage statements if you want to stay in your home and pass it on to your heirs. However, you might wish to preserve a copy of each year’s mortgage statements and give it to your heirs as a valuable gift.

Keep your mortgage records, including monthly mortgage statements and letters between you and the lender, until the debt has been fully repaid in case you haven’t finished paying your mortgage. Similarly, until you become the home’s legal owner and pay off all debts, you should maintain the monthly mortgage statements if the homeowner has gone away and inherited the property. Beyond this, the words won’t be necessary (but you may keep them as a safety measure if you choose).

You will be given several significant pieces of documentation when you purchase a property, including.

  • Deed: Real estate investor Warner Quiroga, president and owner of Prestige Home Buyers in Brentwood, New York, notes that the act, which both the buyer and the seller sign, establishes the buyer’s ownership of the property.
  • Promissory note (mortgage note): A legal agreement in which you agree to use your house as collateral for the debt you have taken on and commit to return it with interest. A deed of trust does this in some states.
  • Purchase agreement or contract: This discount, which must be signed by both you and the seller, usually contains the amount paid, the closing date, and other crucial information.
  • Home inspection report: A thorough account of your home’s condition, including any potential problems, by a professional home inspector.
  • Closing disclosure: information on the term, kind, interest rate, closing expenses, and escrow items related to your mortgage is included in the closing disclosure.
  • Seller disclosure document: According to Quiroga, the disclosure statement outlines any additional information regarding the property that the seller is aware of, such as any flaws or dangers.
  • Title insurance document: This record from the settlement or title firm contains details on your title insurance policy, which guards against problems with the property’s title for the lender (and you, if you choose this coverage).
  • Addendum and amendments: These records describe any modifications made after the initial purchase and sale agreement (written when your house offer was approved).
  • Buyer’s agent agreement: The buyer’s agent agreement is the contract between you and the real estate agent who assisted you in finding and negotiating the house purchase.

What Does A Mortgage Statement Look Like?

To read your mortgage statement properly, one must know what a mortgage statement looks like. This issue can be solved beforehand by simply looking at the various mortgage statement templates and mortgage statement samples available. By looking at this document early, you can avoid complications in reading it when you finally get it. You can also start receiving monthly mortgage statements in the mail from your lender or servicer after you begin making regular payments. They could include information like:

 Image Source: Dundas Life
Image Source: Dundas Life
  • Information about upcoming payments: You may see how much your future mortgage payments will be applied to principal and interest. Totals for escrow and fees will also be provided.
  • Loan and account information: Basic information concerning your loans, such as your account number and the address of your property, will be included in your statement. You should also see your mortgage’s outstanding balance, current interest rate, and loan maturity date (the date your loan will be fully repaid). You could also notice it if your mortgage has a prepayment penalty.
  • History of transactions: This area will display all charges and payments you’ve made since the previous billing cycle, similar to a bank statement.
  • Payment history breakdown: You can see your progress toward paying down your mortgage debt here. It can look at your spending from the previous month and this year.
  • Contact details: You can find alternatives for contacting your loan servicer in this area.

This declaration has a minimal shelf life and can be thrown away or destroyed and has a minimal shelf life and can be thrown away or destroyed whenever you like, according to Merril, CEO of fortuneBuilders, a real estate investor coaching company. “There’s no need to keep them for any prolonged period if you don’t want to because the information on monthly statements constantly changes.

Mortgage Statement Sample

This sample can give you a clear monthly mortgage statement. As we can see in this document, the box on the upper right-hand corner of the report states the amount to be paid in the current month and the amount you will have to pay in case you don’t pay it on time.

Moving down below, the box on the right-hand shows the current amount to be paid and how they got that figure. It shows the interest, principal, and escrow amount that must be paid.
There is also a row that denotes the total fees, and then the final amount for the current month is accumulated.

The box on the left is pretty straightforward as well. It gives you a detailed look into your account and plans details. It includes the borrower’s address, the mortgage’s maturity date, the interest rate the borrower will be charged, etc.

Furthermore, a box shows your transaction history to keep the borrower and the lender updated on all the payments. It is also great as, with the help of this compartment, borrowers can easily spot if any discrepancy is made.

As stated above, the mortgage statement also usually has some messages given down below in the message box. Make sure to read them and stay updated. You can also browse various mortgage statement templates if you are a lender and want to know how to make one. The mortgage statement templates, which can be found online easily, are the best place for beginners to start from. You can look through the various templates provided and find one that suits your needs.

What distinguishes a monthly mortgage invoice from a monthly mortgage statement?

A monthly mortgage statement and a monthly mortgage invoice are the same thing. It contains crucial information regarding your mortgage, such as the principal sum, interest rate, and current payments. Your lender will send you this mortgage. A monthly mortgage statement and a monthly mortgage invoice are the same thing. It contains crucial information regarding your mortgage, such as the principal sum, interest rate, and current payments. Your lender will send you this mortgage paperwork via mail and email on a specific date each month.

 Image Source: Atlantic Bay Mortgage Group
Image Source: Atlantic Bay Mortgage Group

An annual mortgage statement is what?

The principal balance, current interest rate, current balance, term of the mortgage, and lender’s contact information are all shown on an annual mortgage statement. It is often sent to you by your lender at the end of the year and includes a summary of the mortgage payments you have made throughout the year.

Which mortgage documents must I keep?

Purchasing a home involves a lot of paperwork. Some of the essential records you’ll need to retain in connection with your mortgage transactions are the ones listed below:

  • Deed
  • Note of promissory
  • Purchase agreement or contract
  • Disclosure by the seller
  • Report on a home inspection
  • As a final note
  • Disclosure by the seller
  • Document proving title insurance
  • Purchaser’s agent contract
  • Mortgage satisfaction (awarded if your loan is paid off)

If you modify the terms and conditions of an original document, other papers, known as addendum or amendment documents, may follow. It’s crucial to retain these. The documents listed below are among those you must always have with you:

  • Note Promissory
  • Deed
  • As a final note,

Once your mortgage is paid off, you may discard the remaining paperwork. Suze Orman advice keeping “Records of Paid Mortgage” permanently in case someone doubts your mortgage payment.

How long will I keep my mortgage document satisfied?

Your lender will provide documentation proving that you have paid off the entire mortgage once you have paid off your loan in full. The lender will provide a “satisfaction of mortgage” document for you to show that the mortgage has been fully paid off. The lender’s responsible for drawing this document, submitting it to the state and providing you with a copy. To always be able to demonstrate that your mortgage is paid off, you should preserve a duplicate of your satisfaction with mortgage paperwork.

Why should I save my previous mortgage documents?

Mortgage records will be helpful if someone wants to know about your present and previous obligations and loans. They will demonstrate that you are making on-time payments now or have in the past and are still doing so.

Who might be interested in learning about your sense of accountability for debt repayment? It may be:

  • When you’re taking out a new mortgage loan, private loan lenders
  • Bank
  • Employer

If a lawsuit over your repayment or the ownership of a piece of property develops, the police, solicitors, or courts may also request these papers. They can be required if you need to file a tax return.

After refinancing, may I toss away my previous mortgage documents?

No, after refinancing, tossing away your previous mortgage documents is not a good idea. Even if you have refinanced your loan, keep them for as long as you have a mortgage due on you for the same house. The outdated or modified interest rate might be seen in the older documents. Only the most vital records, including your original deed, promissory note, and purchase agreement, need to be kept if you don’t want to save all of the older paperwork. Additionally, you may scan your papers using CamScanner (or any other comparable tool) and store them as soft copies if keeping physical copies is troublesome.

How long should loan statements be kept?

Loan statements should be kept on hand throughout the loan; after a year or two when the loan has been returned, you can throw away any related documentation. Keep the paperwork with you for at least three years, whether we’re talking about loans you’ve taken out against your house or your mortgage payments.

What records must be preserved once your mortgage is paid off?

The letter attesting to the full repayment of your debt (a satisfaction of mortgage paperwork or a mortgage closure statement) is the most crucial document you should save after paying off your mortgage. You should also save any documentation demonstrating your home ownership and mortgage repayment. Additionally, keeping your deed for as long as you reside in your existing home is crucial.

Old house insurance policies should I keep them?

As long as you own the property or are selling it, you should preserve your old homeowner’s insurance policy. You should save these records if there are any pending or anticipated conflicts over the property. It’s OK to destroy and delete these documents if it has been two to three years after you sold the house, moved into a new one, and haven’t yet encountered any legal or financial problems with your bank insurance provider, real estate agent, or any other organization.

 Image Source: Dick Law Firm
Image Source: Dick Law Firm

How long should monthly statements and bills be retained?

In the last part of the essay, we provided a solution to this query regarding mortgage documentation. After paying off your mortgage, you should save your monthly statements for at least three more years.

Here is how long Forbes recommends you retain each of your other monthly invoices and bills:

  • Utility bills every month for six to one year.
  • Insurance contracts when you have purchased new insurance plans, throw them away.
  • Sixty days for credit card statements, but preserve them for three years if they involve tax-related charges.
  • 3-7 years’ worth of tax records (returns and receipts)
  • Bills and statements for home improvement: until you sell the house
  • Payments: One year
  • 3-7 years of prior bank account information and bank statements
  • Necessary receipts: 3 to 7 years
  • Cost of tuition (fee challan, etc.): 3-7 years
  • Major medical expenses: Convenient

How do you keep essential papers organized at home?

I save all of my docs digitally because I’m a tech-savvy entrepreneur. Many people prefer to maintain paper copies. If that applies to you, keep your vital documents in a secure location at home where they are protected from burglars, elements, and other dangers. The most effective way to accomplish this is to store your papers in a safe or deposit box, which can cost anywhere from $60 to $150 a year.

 Image Source: Simply Self Storage
Image Source: Simply Self Storage

Additionally, if you move frequently, it’s an excellent idea to laminate or plastic-coat all your original documents and arrange them in distinct, transparent folders for each family member. It’s ideal for teaching persons to be in charge of their documentation. A key person (the one who typically maintains or takes care of the house) can handle joint or family paperwork.

It’s advisable to entrust a bank or credit union with the custody of your documents if there are conflicts or mistrust within your household. You will require a monthly cost between a few and many thousand dollars.  You should follow the best practices for document maintenance in addition to selecting a place for your extremely secure records, which are:

  • The records you no longer require should be destroyed.
  • Keep original copies of all important papers (such as birth certificates and descriptions of property ownership) in addition to photocopies.
  • Documents should be kept dry and cold.
  • Keep digital copies of all your critical papers in your computer’s internal storage by scanning them all.
  • Use an encrypted and well-known cloud-based option while keeping documents online.

Conclusion

Although you generally won’t need to view your mortgage statements very often, you should still make sure that they are stored in a  secure location that is easy to find. The monthly bills from your lenders are generally safe to throw away. Still, you should save any documents that pertain to the original mortgage contracts and terms (such as the promissory note or deed of trust, the closing disclosure) for at least as long as you own your house. You may wish to maintain original hard copies of these and other essential papers, such as your ownership deed, purchase agreement, and evidence of title insurance.

Tony Bennett

Tony Bennett

Tony Benett makes his living in the insurance industry by teaching and consulting. He is also recognized by the legal profession as an expert on insurance coverages. His insurance experience includes having worked at the company level, owned an independent general agency and having worked for an insurance association. He has received various certificates over the past few years and helps his clients and readers by giving them a realistic outlook on what they can expect to achieve within their set targets. At Insurance Noon, he is known for his in-depth analysis and attention to details with accuracy. He has been published as one of the most referred agents by his peers in the insurance community. Tony loves the outdoors and most sport events. His passion other than providing excellent advice is playing golf.

Insurance Noon is the world's leading source of insurance related content on the web, focusing on industry news, buying guides, reviews, and much more.