Using Time Wisely

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Check-up: Credit Report Time

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Photograph Credit: Flickr (Dan Eriksson)

If you are following the schedule for requesting your credit reports that I recommend, then it is time to make another request by the web site, telephone, or mail.

My preference is by phone to get a written response.

With the availability of a free report each year, I refuse to pay a service to issue my free report. By using my time wisely to track our credit, I request one report every 4 months. This month, I will be requesting Paul’s Equifax report and my Experian report.

NOTE: Before ordering your credit report, be sure you have waited at least one year since your last request for that report. If you make a second request within one year, then you will be charged for the second request.

When we receive these reports, I will review them for errors. If a discrepancy is noted, then I will dispute it. If all is correct, then I will replace last year’s record with this new report in the first file slot of my Box 1 documents.

I will also run a free Experian credit score. This score will then be placed with the current credit report. I will then put the file away until October.

How is your file coming along? Are you still disputing errors with the credit bureaus? If so, be thorough and get it right. You will be glad you spent your time wisely.

Home Ownership: Deeds

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Having completed the first two categories: Credit Report/Card Documents and Important Personal Documents in our filing system, it is time to focus on the third category: Home Ownership Documents. Since the first two categories took up file slots one through seven, the home ownership documents begin in the eighth slot in my accordion filing system (pictured).

In case you are thinking, “I don’t own a home, so I can skip this section,” hang in there. When I setup our filing system, Paul and I were living in a rented townhouse. Though we did not own a home, we still had documents housed in this category. Then when we built and purchase our first house (about 1.5 years later), I knew exactly what documents I needed to keep and where to place them. So, hang in there through this category. If you plan to own a home at some point in your future, then this section can help you prepare for that day.

Here is the checklist from the Protection Portfolio system by Suze Orman:

  • Deeds
  • Promissory Notes*
  • Homeowner’s insurance
  • Co-ownership property agreement*
  • Fire insurance
  • Copy of survey
  • Copy of title policy
  • Appraisals and evaluations of valuable items such as jewelry, art, and antiques

Items with an (*) are additional records Suze Orman suggests for this category that I do not have in my file.

Having researched mortgages and purchased one home, I will share with you my experiences. In no way am I offering advice or suggesting that you follow the path Paul and I have trod. If you are looking for information on mortgages, insurance, or other items dealing with home ownership, then please consult a highly recommended professional in the field.

Located in this eighth file slot under Home Ownership, I have the following 4 documents paper clipped together:

1. Recorded Deed. To the best of my knowledge, this document was sent to me from the Register of Deeds about a week after our closing. Our deed is an original 2-page document.

2. HUD Settlement Statement for Mortgage. The U.S. Department of Housing and Urban Development (HUD) requires this standardized form for federally related mortgages and is a financial overview of our closing. This 4-page document included the sale price, sellers’ costs, buyers’ costs, and all payments. I consider this document my receipt for our mortgage.

3. HUD Settlement Statement for Line of Credit. This document is a 3-page receipt for our line of credit account.

Though you may or may not agree with our choice for home mortgage, we did a lot of research before building and purchasing our home. Our best option was an 80/20 loan. We chose a mortgage to cover 80% of our contract price, and a 20% line of credit to cover the remaining balance.

By splitting the amount into two loans, we avoided paying PMI (private mortgage insurance) which is insurance for the lender and cannot be claimed on taxes. This choice has and continues to work well for us, and I have no buyer’s remorse.

4. Copy of check and receipt from attorney’s office. At our closing, we were refunded for our escrow amount. When Paul and I contracted with our builder, we paid a lump sum up front. Then about 5-6 months later at our closing, we received a check for the balance in that account. In this file slot, I keep the copy of the check with the receipt.

Since Paul and I only own one home, our filing system holds one set of these documents. If you own multiple properties or homes, then you will want to keep separate file slots for each property. If you have many properties, then another accordion file or system may be in your future. 🙂

This set of documents is housed in the eighth file slot of my accordion filing system under the third category: Home Ownership Documents. The next item in Suze Orman’s checklist is Promissory Notes. Since I keep another filing system for our home documents, I do not have our promissory notes or mortgage and line of credit paperwork in this filing system. Therefore, I am not going to write a separate post for them. If you do not have a “home” for your promissory notes and closing documents, you might consider housing them in this file.

Though I will not post about promissory notes next week, I will share my homeowner insurance documents housed in this category. I hope you are successfully organizing your important documents to help you use your time wisely for years to come. Happy organizing!

Home Ownership: Homeowner’s Insurance

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As I get out my file Box 1 to gather the documents from the eighth slot, I am reminded why I chose to spend my time wisely in organizing my family’s important documents. Knowing that all the documents are in one location within easy reach and that I can locate any given policy within a one-minute time frame thrills me. Using my time wisely, over 7 years ago, was time well spent.

Reflection on a job well done is encouraging. If you are making progress, then take a step back. Admire your progress (no matter how small), and be encouraged that “Rome was not built in a day.” Little steps here and there will get you to your desired end. Just keep on track.

In keeping you on track, we are focusing on the third category, Home Ownership Documents, and have added our deed(s). The next item in this eighth file slot of my accordion-filing system is our homeowner insurance documents.

When I first set up our filing system, Paul and I were not homeowners. However, we were renting and had renter’s insurance. Those rental insurance documents were housed in this category until they were replaced for our homeowner’s insurance. Though you might not own a home (yet), you can still benefit from setting up your organizational system before you purchase your first home.

My pack of homeowner insurance documents includes the following items:

  1. Homeowner’s Policy. Our policy is a booklet printed on thin paper.
  2. Declarations Page. I receive this page with the notification of our annual bill.
  3. Annual Bill. I keep the most current annual bill.
  4. Copy of Mortgage Statement with Insurance Payment. When my mortgage company pays the homeowner’s policy (out of our escrow account), I make a copy of that mortgage statement and keep it with the bill. If the payment is ever in question, I will have the proof with my policy.
  5. Notices of Changes to our Policy. At the time of renewal, our annual statement may include Notices of Change. As I review these documents, I will keep any Notice of Change forms and add them to this section of my file.
  6. Privacy Policy. Each year our insurance company sends an updated privacy policy. I keep the current policy with our insurance documents.

These six items are placed in the listed order and attached with a paper clip. I then have these items filed behind the deed paperwork. The next two items in Suze Orman’s checklist are co-ownership property agreement (which I do not have) and fire insurance. I will not include a separate post for fire insurance. Our homeowner’s insurance covers any damage due to fire or lightning. If your state requires additional insurance for fire and you have fire insurance, then you can add those documents in this file.

Next week as we continue this category of home ownership, I will share an additional set of documents I have added to this category. In theory these documents could be added to another category, but I find the paperwork quicker when filed in this category. Come back next week where I will fill you in. In the meantime, happy organizing!

Question: What additional documents do you include with your home insurance documents?

Home Ownership: Property Taxes

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If you are following the list of items in the home ownership category, you may notice that property taxes were not included in that list. You are right!

Usually property taxes would be housed with the tax documents located in Box 3. However, after using this system for a number of years, I have found that when I need these tax documents, I look in the home ownership file first. If I don’t find it there, then I look in the tax file.

To assist me in using my time wisely, I have chosen to move the property tax documents from the tax file to the home ownership file. Making this change is my personal preference. If you would look in the tax category first, then place these documents there. Find a system that works for you that will allow you to use your time wisely.

Continuing with our filing system under the home ownership category, we have added our deed(s) and homeowner’s (or renter’s) insurance documents. Behind these documents, I have included the following property tax papers:

1. The current property tax notice. This is an annual statement sent from our county.

2. Copy of tax payment. Since this payment is made by our mortgage company from our escrow account, I make a copy of the mortgage statement showing that the taxes were paid. In the event I need to prove that the payment was made, I have the copy of the receipt with the tax notice.

3. Notices of Classification, Appraisal, and Assessment of Real Estate Tax. These documents list our home’s assessed value for tax purposes. Any countywide reassessment changes will be included on this form.

These items are organized with the current year on top and paper clipped together. (I like using paper clips rather than staples. The staples leave marks when I need to replace documents. The paper clips do come off periodically, but overall, they work great.) I then place these tax documents behind the insurance paperwork for easy access when needed.

Next week we will continue adding documents to this category of home ownership. I hope you are taking steps to getting your paperwork organized. It is a process that is worth your time and energy.

Question: Do you prefer using staples or paper clips to keep your documents together?

Home Ownership: Property Survey

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After taking a slight detour from Suze Orman’s Protection Portfolio’s Checklist, I will return without anymore turns in this category. 🙂

The past three weeks, we have concentrated on our home ownership documents which are housed in our filing system. This third category of our Box 1 items currently holds our deed(s), insurance (homeowner’s or renter’s), and property tax documents.

The fourth item housed in this category is a survey of our property. If you have numerous properties, then you might consider making a separate category per address. With multiple properties, you will have these documents for each property. Keeping them organized will be extremely beneficial for you.

Our survey is a one-page document showing a scaled diagram of the property we have purchased. The drawing includes where on the property our house is located, easements, and property lines. This document also includes a small location map, book identification where the survey is recorded, and a raised seal deeming this survey official.

Having setup this filing system before we built and purchased our house, I went into our closing ready to ask for a copy of our survey. Now, the survey may already have been packaged with our closing documents. I am not sure if this is standard practice or not. However, I purposefully asked for a copy and received it before our closing session was complete.

If I had skipped preparing the home ownership category of my filing system, then I would not have known to ask or looked for our survey.

If you cannot locate your survey, you can contact the Register of Deeds Office in the property’s county for instructions. Each county has different regulations, so there is not a standardized request form to obtain your survey.

If you have closed recently on your home, I would check with your mortgage lender or closing attorney (if you had one) to obtain a copy. Usually the mortgage company and attorney’s office will be able to locate your survey quicker than the county’s government office.

In my file, our survey is located behind our property tax documents. It is a small document, but one I will be glad to have should we extend our home or add a shed to our property.

Next week I will share another document in our home ownership category. In the meantime, keep using your time wisely to stay organized.

Question: Was your survey included in your package of paperwork at your closing?