When you buy a house, you’ll get a new piece of paper in the mail: your mortgage statement. So, when you begin your new life as a homeowner, we want to assist you in getting to know your home as quickly as possible. You’ll likely have to deal with it for a very long time. You also need to know about the tips to get pre approval mortgage.
If you receive a mortgage statement from your lender, you can also refer to it as a billing statement. This document contains information about the status of your loan. Most lenders only send out monthly mortgage statements, but you may view them at any time by logging on to your account and accessing them online.
Following are the information you will find in your mortgage statement:
- Loan information
The loan information area offers you everything you need to know when it comes to your mortgage account. Your account number, property address, and current interest rate may all be included in this area. When market rates fall, you may be able to save money by refinancing.
- 2. Your monthly payment summary
Your payment summary for the month tells you how much you owe on your loan. It includes your principal balance, interest rate, and any taxes or insurance premiums you have to pay into an escrow account, among other things. In most cases, this section will also include past-due accounts. If you make an extra payment on your loan, you might want to acquire another mortgage statement to check your revised summary.
- 3. Transaction activity
Your transaction history gives you a better idea of how much you owe and how quickly you pay it off. This might assist you in better comprehending the amortisation process and the advantages of making a supplemental payment.
- 4. Client service information
Client service information is typically included in the mortgage statement. If something appears to be incorrect with your loan, use this section to get in touch with your lender.
- 5. Year-to-date payments
For the current year, this part shows you how much you’ve paid in principal and interest. If you maintain a home office or claim another home-related deduction, this information may be extremely useful to you. Calculating your monthly mortgage payment is very vital.
Why is keeping mortgage documents important?
Ensure Your Payments Are Accurate Mortgage statements provide you with a breakdown of how much you owe and how much you’ve already paid off each month. Verify that all of your payments are correct by comparing your bills against one another. Especially if you wish to make a loan payment increase, this is critical. Some lenders will apply a payment to the next month’s debt instead of directly to your principal if you make a payment over the weekend. You’ll be able to notice this mistake immediately if you monitor your remarks.
- Calculating Capital Gains Tax
If you sell your house, you may have to pay capital gains tax. If you sell an asset for more than you paid for it, you’ll have to pay this sum. Any modifications you make to your house can be deducted from the price you paid for it. This raises the amount you “spent” for your house and minimises the difference between the purchase and sale prices. This lowers your taxable capital gains. Keep records of any home improvements you make, such as repairs, expansions, or renovations, to aid in calculating your capital gains tax liabilities. This documentation will be useful if you are ever audited.
- 2. Documentation For Audits
Purchasing a home and paying down your mortgage may have tax ramifications for your finances. If you file federal taxes and the IRS audits you, you’ll need your documentation on hand to exhibit them to the IRS. For three years following the date you submit your tax return, the IRS may request written confirmation of any deductions, income, or credits you claimed. If you fail to file a tax return in a particular year, there are no statutes of limitations on audits. If you miss a tax deadline for any reason, you’ll want to save all of your loan and property records.
How long should the mortgage documents be kept?
The item determines the length of time you wish to keep your mortgage records. Monthly statements should be kept for the shortest time possible. You don’t have to maintain these documents for long because their information is fast out of date. Keep them until you’re sure all of your payments have been recorded, which normally takes a few months. If you find a mistake in one of your statements, you may want to preserve them all for a longer period of time.
Some documents should be kept for the rest of your life. Keep a copy of your purchase contract, as well as documents of any home repairs you’ve made and the results of your house inspection. When you’re selling your home or performing maintenance, these can be priceless sources of information on your property’s state. Continue to use the product under warranty until the end of the warranty period.
Conclusion
There is a lot of paperwork associated with obtaining a mortgage. Keep as much of it as you can for tax, accounting, and general upkeep. Keep a copy of each of your mortgage statements for a few months to check that all of your payments are accurate and accounted for. Always keep a personal copy of your deed, note, and disclosure for the duration of the loan. Keep your home inspection report and seller disclosures safe for as long as you own the property. After the term of your house warranty expires, you can dispense with it. Store your files in a fireproof cabinet in your house and a cloud-based internet storage system.