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You're in Your New Home
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Buying a Home - In Your New Home
This section discusses loan closing documents you must keep, your
new mortgage loan responsibilities, and what to do if you have questions
about your loan.
Papers
You Must Keep
You should keep a copy of every document you signed at the
closing
meeting. It is particularly important to keep a copy of your settlement
form. You will find it useful when you file your taxes and if you
sell your home. For example, the real estate taxes and loan discount
points you paid as
part of your closing
costs are tax deductible. Therefore, you will need to refer
to your settlement form to get these amounts when you file your
taxes.
In addition to the closing documents, you should
keep all insurance records, such as homeowner’s
and title insurance.
You would need to have access to your homeowner’s policy if,
for example, someone were to sue you because they were injured on
your property. And you would refer to your title insurance policy
if you were to find a flaw in the title after you buy the house.
Keep these important records in a safe place.
You may store them in a safe deposit box or a bank vault in addition
to keeping a copy of them in your home.
Making
Your Loan Payments
Your mortgage note (one of the closing documents you signed) states
the terms of your mortgage, including
- the date on which your payments must be made,
- the location to which they must be sent, and
- the penalty charged for late payments.
Your lender normally sends you a coupon book
after the closing meeting to simplify the mortgage payment process.
If
Servicing of Your Loan Transfers
At the closing, your lender is legally obligated to provide a statement
showing how frequently your lender transfers (or “sells”)
servicing on mortgage
loans to a third party. This means that someone other than the lender
who originated and approved your loan will service the loan. Servicing
includes the collection and processing of your monthly payments.
You must be notified of the transfer by both your original lender
and the new lender. Remember, never send your mortgage payment to
a different party until you’re officially notified of the transfer
by your lender.
In some instances, your lender may sell your mortgage to an investor,
such as Fannie Mae®. This is how Fannie Mae makes
sure lenders don’t run out of mortgage money. However, you
would still send your monthly payment to the lender who services
your loan.
If
You Have Loan Questions
Anytime you have questions about the terms of your loan or run into
complications, contact your lender. You may have an emergency that
changes your financial situation. For example, if you’re laid
off from your job or if you’re sick and temporarily unable
to work, you should contact your lender immediately if you have
a problem making your monthly mortgage payment. Otherwise, you risk
losing your home. Your lender should be willing to work with you
to resolve the problem. Various types of relief may be offered to
give you additional time to make the payment.
At the end of each year, your lender will be
in contact with you. You’ll receive a statement that shows
your mortgage balance and the total amount you've paid in
principal
and interest. You’ll
need to know the amount of interest paid to file your taxes. The
tax deduction for interest alone may save you thousands of dollars
in federal income taxes. Especially in the early years of your mortgage,
the bulk of your monthly mortgage payment is interest.
Home
Maintenance Checklists
Your mortgage requires that you adequately maintain your property
and not allow it to deteriorate. As a homeowner, you can’t
afford to sit back and defer maintenance. You can extend the life
of appliances and fixtures and avoid expensive repairs by doing
routine maintenance yourself.
It’s a good idea to set up a budget for
your home’s regular maintenance and unexpected repairs. You
may want to budget 1 percent of the purchase price of your house
to cover annual maintenance and repairs. You also want to adhere
to a regular savings plan to cover essential bills, emergency repairs,
and large, periodic expenses such as property taxes and
homeowner’s
insurance (if they’re not held in an escrow
account by your lender). Some financial advisors suggest
saving 5 percent of your take-home pay. You must commit this amount
every payday to make it happen.
The following seasonal checklist will give you an idea of what
you can do in the fall and spring each year to maintain your home:
Spring Checklist
Outside Items
- Check all weather stripping and caulking around windows and
doors, especially if you have air-conditioning.
- Check outside of house for cracked or peeling paint; caulk
and repaint as necessary.
- Remove, clean, and store storm windows (if removable).
- Check all door and window screens; patch or replace as needed;
put screens up (if removable type).
Inside Items
- Replace filters on air-conditioners.
- Check and clean dryer vent, stove hood, and room fans; change
or clean filters on furnace.
- Check seals on refrigerator and freezer; clean refrigerator
coils; clean burner surfaces; adjust burners.
- Clean fireplace; leave damper open for improved ventilation
if home is not air-conditioned.
- Check basement wall and floors for dampness; if moist, remedy
as appropriate.
- Clean dehumidifier according to manufacturer’s instructions.
- Check for leaky faucets; replace washers as necessary.
- Check attic for proper ventilation; open vents.
- Clean drapes and blinds; repair as needed.
Fall Checklist
Outside Items
- Check all weather stripping and caulking around windows and
doors; replace or repair as needed.
- Check for cracks and holes in house siding; fill with caulking
as necessary.
- Remove window air-conditioners, or put weatherproof covers
on them.
- Take down screens (if removable type); clean and store.
- Check storm windows and doors; clean and repair as needed;
put back up (if removable type).
- Drain outside faucets.
- Clean gutters and drain pipes so that leaves won’t clog
them.
- Check roof for leaks; repair as necessary.
- Check flashing around vents, skylights, and chimneys for leaks.
- Check chimney for damaged chimney caps and loose or missing
mortar.
- Check chimney flue; clear obstructions; make sure damper closes
tightly.
Inside Items
- Check insulation wherever possible; replace or add as necessary.
- Have heating system and heat pump serviced; have humidifier
checked; change or clean filters on furnace.
- Drain hot water heater; remove sediment from bottom of tank;
clean burner surfaces; adjust burners.
- Check and clean humidifier in accordance with manufacturer’s
instructions.
- Clean refrigerator coils.
- Clean fireplace.
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