I own my home, no really.
December 11, 2009 8:11 AM Subscribe
So I've paid off my mortgage, almost. What happens now?
After paying down lots of extra principal every month, my mortgage has less than one payment remaining (7 years into a 15 year fixed rate.) I received a payoff letter that was apparently triggered by the low principal balance. It appears that I am to send a certified check to the mortgage company's payoff processing office; seems simple enough. But I'm wondering what happens then, behind the scenes and in front of them. How is the payoff communicated to... um... that's part of my question... who gets told? I guess maybe the county recorders office? Is someone going to mail me the actual deeds to the property? What about the escrow, will I be sent a cheque for the dregs automagically? What else will happen? Is this going to be a big anticlimax?
Location: Indiana. Mortgage is held by GMAC.
I know I should be happy, and I am, but because this is new and I don't know anyone who's been through the process, I'm finding it rather stressful.
(For those wondering: I'm aware of the pros and cons of paying down a mortgage ahead of time. It's all part of a larger strategy, a major part of which is reducing my income requirements as much as possible as quickly as possible.)
After paying down lots of extra principal every month, my mortgage has less than one payment remaining (7 years into a 15 year fixed rate.) I received a payoff letter that was apparently triggered by the low principal balance. It appears that I am to send a certified check to the mortgage company's payoff processing office; seems simple enough. But I'm wondering what happens then, behind the scenes and in front of them. How is the payoff communicated to... um... that's part of my question... who gets told? I guess maybe the county recorders office? Is someone going to mail me the actual deeds to the property? What about the escrow, will I be sent a cheque for the dregs automagically? What else will happen? Is this going to be a big anticlimax?
Location: Indiana. Mortgage is held by GMAC.
I know I should be happy, and I am, but because this is new and I don't know anyone who's been through the process, I'm finding it rather stressful.
(For those wondering: I'm aware of the pros and cons of paying down a mortgage ahead of time. It's all part of a larger strategy, a major part of which is reducing my income requirements as much as possible as quickly as possible.)
Well, there aren't really any cons to paying off a mortgage early, unless you need that cash for something else.
As for the deed to the house, once you own it free and clear your name should appear on it.
I'm not sure what you're asking though? Are you asking who fills out the various pieces of paper and ensures that everything is done correctly?
If you are, that should be whoever holds your mortgage. But you need to keep an eagle eye on everything and make sure your interests are represented. If you hae any doubts about a document sent to you, consult with a real estate attorney.
posted by dfriedman at 8:15 AM on December 11, 2009
As for the deed to the house, once you own it free and clear your name should appear on it.
I'm not sure what you're asking though? Are you asking who fills out the various pieces of paper and ensures that everything is done correctly?
If you are, that should be whoever holds your mortgage. But you need to keep an eagle eye on everything and make sure your interests are represented. If you hae any doubts about a document sent to you, consult with a real estate attorney.
posted by dfriedman at 8:15 AM on December 11, 2009
Best answer: First, congrats! Don't stress about it, celebrate it! It's awesome.
What needs to happen is that they need to release their lien on the property. That's probably the biggest thing that you need to make sure is done. You need a letter from them, possibly notarized, that says "buxtonbluecat has made all payments and we release the lien." This needs to go to the county who will note it in their computer system, and you probably need to get the deed/title to the property from the mortgage company, with their signature on the release of lien area.
Once you have those two things, you can prove to anyone who asks that you do indeed own the property free and clear. You may need to send in the deed to have a new one printed without the lien holder stuff on it, I don't know if this is done automatically or not.
The other thing you need to do is make sure the county sends your property tax bill to your address so that you can make sure your taxes get paid properly.
If it was me, I would try and see if there is a GMAC office nearby and try to arrange to do it in person. If only for the ceremony of it. And so you can get your hands on all the paperwork.
posted by gjc at 8:32 AM on December 11, 2009 [1 favorite]
What needs to happen is that they need to release their lien on the property. That's probably the biggest thing that you need to make sure is done. You need a letter from them, possibly notarized, that says "buxtonbluecat has made all payments and we release the lien." This needs to go to the county who will note it in their computer system, and you probably need to get the deed/title to the property from the mortgage company, with their signature on the release of lien area.
Once you have those two things, you can prove to anyone who asks that you do indeed own the property free and clear. You may need to send in the deed to have a new one printed without the lien holder stuff on it, I don't know if this is done automatically or not.
The other thing you need to do is make sure the county sends your property tax bill to your address so that you can make sure your taxes get paid properly.
If it was me, I would try and see if there is a GMAC office nearby and try to arrange to do it in person. If only for the ceremony of it. And so you can get your hands on all the paperwork.
posted by gjc at 8:32 AM on December 11, 2009 [1 favorite]
Best answer: GMAC will send a "satisfaction/discharge of mortgage" to your county recorder's office, which they will file. This is the "who gets told".
They should also send you a check for any money that is currently in your escrow account.
Really, you don't have to do very much. A month or two down the line, though, you might want to check with your county recorder to make sure the satisfaction/discharge was recorded. Many counties have their land records online and it's easy to check, or you might have to actually go into the office and ask. (This can save you a lot of hassle when you go to sell the property.)
posted by Lucinda at 8:36 AM on December 11, 2009
They should also send you a check for any money that is currently in your escrow account.
Really, you don't have to do very much. A month or two down the line, though, you might want to check with your county recorder to make sure the satisfaction/discharge was recorded. Many counties have their land records online and it's easy to check, or you might have to actually go into the office and ask. (This can save you a lot of hassle when you go to sell the property.)
posted by Lucinda at 8:36 AM on December 11, 2009
You now need to cover insurance and property taxes on your own.
This. You're going to have to be proactive to make sure you start getting the insurance and property tax bills. There have been cases where the county just doesn't get around to changing the address and mailing them to the owner.
posted by yarly at 8:45 AM on December 11, 2009
This. You're going to have to be proactive to make sure you start getting the insurance and property tax bills. There have been cases where the county just doesn't get around to changing the address and mailing them to the owner.
posted by yarly at 8:45 AM on December 11, 2009
Find out what kind of notice your insurance company receives from the mortgage company regarding this. If nothing, then find out what your insurance company needs in order to remove the mortgage company as a lien holder.
If you have an insurance claim in the future, it is a hassle to get the lien holder to sign off, if they are no longer the lien holder.
posted by Midnight Skulker at 8:53 AM on December 11, 2009
If you have an insurance claim in the future, it is a hassle to get the lien holder to sign off, if they are no longer the lien holder.
posted by Midnight Skulker at 8:53 AM on December 11, 2009
Hint: be very careful mailing a certified check. Instead, use a bank check or wire the money. We did the exact same thing about 15 years ago, but mailed a 30K check which the mortgage company said they never received. Evidently for a bank, a certified check is practically the equivalent of cash. We had to go through holy hell to get payment stopped on the check.
posted by digsrus at 9:14 AM on December 11, 2009
posted by digsrus at 9:14 AM on December 11, 2009
You should already have the original deed for the house. If you don't, contact your title insurance company to see if they still have it. The mortgage company shouldn't have ever had the Deed.
The mortgage company will otherwise do just what Lucinda and gjc said above.
posted by LOLAttorney2009 at 10:48 AM on December 11, 2009
The mortgage company will otherwise do just what Lucinda and gjc said above.
posted by LOLAttorney2009 at 10:48 AM on December 11, 2009
This thread is closed to new comments.
On your mortgage agreement, there should be a process by which you get the deed. You will probably need to "apply" for it in some way.
But, as I said, the main thing is to budget for insurance and taxes, which, likely were paid for by your mortgage.
posted by Danf at 8:13 AM on December 11, 2009