When you apply for a mortgage loan to buy a home, you have to share a lot of personal information with your mortgage broker and lender. You may need to provide sensitive information such as your name, address, Social Security number, pay stubs, bank statements, information about your investment and retirement accounts, copies of your tax returns, etc. The lender also pulls your credit report and credit scores to check your credit history.
It’s important to protect all this information from falling into the hands of criminals. Personal data can be used to access your accounts, open fraudulent lines of credit in your name and more.
Here’s how to help avoid identity theft during the homebuying process.
1. Find the Right Lender
You need to make sure you’re working with a mortgage broker or lender you can trust. Don’t automatically go with the first option you find on Google. You need to ensure you’re working with people you can trust during your homebuying process.
Research the best lenders and mortgage brokers that offer the type of mortgage you need. You may want to speak with multiple lenders to find the right loan and get the best rate possible. Ask friends and family for referrals. When you’re evaluating a business, check for complaints with sites like the Better Business Bureau and the Consumer Financial Protection Bureau.
2. Learn About Security
Before sending personal information to a lender or mortgage broker, make sure you understand their security protocols. What steps do they take to make sure your information is safe from identity theft? For example, do they provide a secure online portal to upload your documents, or do you send information over in an unencrypted email (hint: the first option is safer).
You should also know if the business shares information with other third parties. For example, how long do they keep your documents on file before being destroyed? Make sure you know what they do with your information.
Of course, you need to do your part to protect your identity. Never send anything over a public, unsecured Wi-Fi network. Make sure you use strong, unique passwords for every system you log into.
3. Secure Personal Documents
Personal documents you keep in your home, such as the deed, mortgage closing paperwork and other essential documents should be kept in a safe lockbox in a secure location. Anything you don’t need to hold onto should be shredded before being thrown away. So, no identity thief can get a hold of your personal information by going through your trash or recycling.
4. Monitor Your Credit During the Homebuying Process
It’s important to monitor your credit when you plan to submit a mortgage application during the homebuying process. You want to make sure your credit is in the best shape it can be when you apply for a loan, so you can get your application approved and access lower interest rates and better terms. Monitoring your credit ahead of time can help you ensure your credit is in good shape.
You also want to continue to monitor your identity and credit after you close on your home. This can help you quickly identify signs of identity theft, such as accounts you never opened or applications for credit that you never submitted. While Identity theft protection and credit monitoring is a good idea at all times, it’s especially beneficial during the homebuying process and directly after.