Buying a home requires you to share more personal information than almost any other transaction. Your Social Security number, bank account details, tax returns, pay stubs, and employment history all pass through multiple hands during the mortgage and closing process. This makes home buyers a prime target for identity theft. Here is how to protect yourself.
Know Who Is Asking for Your Information
The mortgage process requires many documents, but you should always know who is asking for them and why. Your lender needs your financial information to process your loan. Your title company needs identification to verify your identity at closing. Your real estate agent needs personal information to prepare offers and contracts. But if someone you do not recognize asks for sensitive information, stop and verify their identity before providing anything. Call the company at a phone number you already have, not a number provided in the request.
Use Secure Portals for Document Sharing
Whenever possible, share sensitive documents through secure client portals rather than email. Secure portals encrypt your documents in transit and require authentication to access. Many lenders and title companies now offer these portals as a standard part of their service. If your professionals offer a portal, use it. If they send documents only by email, ask if a more secure option is available.
Protect Your Passwords
Create strong, unique passwords for every account related to your home purchase. Your loan application portal, your title company portal, your email account, and your bank account should all have different passwords. Use a password manager to generate and store complex passwords if remembering them is difficult. Enable multi-factor authentication on every account that offers it.
Monitor Your Credit During and After the Transaction
Your credit will be pulled multiple times during a home purchase. This is normal. But it also means your personal information is circulating among multiple parties. Monitor your credit reports for any accounts or inquiries you do not recognize. You can get a free credit report from each of the three major bureaus at AnnualCreditReport.com. Consider freezing your credit after closing to prevent anyone from opening new accounts in your name.
Secure Your Physical Documents
Not all identity theft happens online. Physical documents containing your personal information can be lost, stolen, or accessed by unauthorized people. Keep physical copies of your financial documents, tax returns, and identification in a secure location. Shred documents you no longer need rather than throwing them in the trash. When you receive documents by mail, collect them promptly from your mailbox.
Be Cautious With Digital Copies
When you send digital copies of your identification, bank statements, or tax returns, make sure you are sending them through a secure channel. If you must send documents by email, consider encrypting the files or sending them in separate emails to reduce the risk. Delete digital copies from your device after the transaction is complete if you no longer need them.
Watch for Signs of Identity Theft After Closing
Identity theft can surface months or even years after your personal information is stolen. Watch for warning signs including bills for accounts you did not open, denials of credit for no apparent reason, unfamiliar charges on your credit card statements, and notifications from companies about data breaches. The earlier you catch identity theft, the easier it is to resolve.
Buying a home is an exciting milestone. Protecting your identity during the process ensures that the excitement is not overshadowed by the stress of fraud. A few simple precautions can keep your personal information safe.
