How long do I need to keep my statements?
Question of the week: How long should we keep statements?
Answer: “I’m cleaning out some boxes, how long do I need to keep my mortgage statements?” Was a message I received, almost identical in each message, over six days this past week from two different friends of mine.
My first thought was, isn’t it Spring cleaning when this happens? Is Autumn cleaning a new thing so it coincides with pumpkin spice everything?
My second thought was, this is a great question of the week we have not covered in several years.
I will expand the statements to include loan documents and other important files and documents in the answer.
The IRS answers the above question for us, keep records for 3-years from the date you filed your original return, or two years after you paid the tax, whichever is later. If you filed a claim for a loss for worthless security or bad debt deduction, keep the records for seven years.
If you have filed and paid your taxes due for 2022, you do not need to save any records for 2019 and earlier—but I am always safe and add one year, so our records from 2018 and earlier have all been shredded.
Always shred financial statements and documents! Home Depot has small shredders for as low as $25—which can save you thousands if your financial information gets in the wrong hands.
Documents of a legal nature are different however than records you maintain for tax purposes.
When you close a mortgage for a purchase or refinance you will receive a thick packet of documents after closing. Typically, these are all in one bundle so it is easy to retain everything you receive. However, if you are a bit OCD and only want to keep what you need to keep…retain any deeds that are recorded.
Deeds transfer ownership (Grant Deeds) or place the mortgage as a lien on your property (Trust Deed).
When you payoff a mortgage through sale, refinance, or you write a check, a reconveyance will be filed with the county clerk removing the Trust Deed from the property as a lien. You should receive a copy of this in the mail after it is recorded (and all recorded deeds), save the recorded reconveyance in case somewhere down the years someone says the lien is still owed.
If you have been sued and a judgment has been placed against you for an unpaid debt or other obligation that may be owed. When the debt is paid off make sure you get a release of lien from the creditor, and retain a copy of that after filed with the county clerk.
Besides the deeds, another very important document to save from your loan closing documents is the Note. This document contains the terms of the loan. This is particularly important if the loan is an adjustable-rate loan (as in a Home Equity Loan) to ensure when rate changes occur, they are in line with the terms of the Note. As well, if (perhaps when) the servicing of your loan payments changes from one lender to another, it is important to have a copy of the Note in case the new servicer makes an error in the amount owed for your payments.
An aside of transfer of servicing, if you receive notification that this is occurring, make sure you have access to the last two statements from the prior servicer to compare the details of amount paid, loan balance, etc.
Any loan applications documents you receive from closing should probably be shredded as they contain everything a person would need to engage in identity theft and run up credit in your name.
If you have several years’ worth of statements, forms, documents you no longer need that will overwhelm the capacity of a home shredder, there are several places where you can bring the files to be shredded—Google is your friend to find them.
Finally, this question becomes increasingly less relevant as almost all statements you need are available on-line through your lenders, banks, insurance companies, credit card vendors and other businesses. Taking advantage of paperless statements not only frees you from shredding parties every year, but reduce the opportunity for theft of your statements through mail interception.
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Three months in a row, that is the run for increases in the Consumer Price Index as data showed prices rose 0.6% in August (highest one-month increase in 14-months), and is up 3.7% year over year; CPI was up 3.00% in June and 3.2% in July. The Federal Reserve, when looking at price data for decisions as to whether to change its benchmark rate, analyzes the “core” CPI data, which strips out food and energy prices—the Fed prefers this part of the index as it is less volatile. Core CPI dropped in August from 4.7% in July to 4.3% in August, the lowest in 22-months. The core index dropped so much because gas prices jumped 11% in August (as you likely have noticed) and was responsible for over half the CPI increase. Inflation increasing three straight months is not positive for mortgage rates.
Gas not only had a large impact on CPI, but also retail sales in August, which increased 0.6% from July—the 5th straight month of increasing sales. Because gas prices jumped in August, and because gasoline sales are included in retail sales, pump sales were the primary reason for the increase in sales.
Rates for Friday September 15, 2023: Rates up again this week on the economic data showing an economy that may see some reduction in prices on goods and services that aren’t basic necessities, like food and gas, but overall an economy with high inflation.
FIXED RATE MORTGAGES AT COST OF 1.25 POINTS LOCKED FOR 45 DAYS FOR PURCHASE TRANSACTIONS:
30-year conforming 7.25% Up 0.25%
30-year high-balance conforming 7.625% Flat
Please note that these are base rates and adjustments may be added for condominiums, refinances, credit scores, loan to value, no impound account and period rate is locked. Rates are based on 20% down with 740 FICO score for purchase mortgages.
Every year the gear comes out a bit earlier and earlier for Halloween, Thanksgiving, Back-to-School, Easter, and of course Christmas. It causes me pause to see an over-lap of skeletons, cornucopia centerpieces and Santa Clauses in the aisles at the same time.
What did not give me pause was seeing some establishments that were promoting “starting Octoberfest early.” No special decorations needed, no cards or gifts to fret over, just finding time in the schedule to enjoy some beer and German food—particularly delicious sausages.
So while others are searching for the perfect pumpkin spice Halloween punch that can be adapted for Thanksgiving—some of us may be at the local with a sausage platter, pretzel with an assortment of mustards, and a stein of the perfect beverage to accompany them.
Have a great week,
Dennis
Past Weekly Rate & Market Updates can be found on my blog page at my website www.DennisCSmith.com/my-blog
