After paying mortgage, what?
July 6, 2016 8:32 PM Subscribe
After paying off our mortgage, next steps?
So we will finally be paying off our full mortgage. What are the next steps we should be taking to make sure it is all done with (paperwork/legal/liability/insurance/anything else you can think of?).
So we will finally be paying off our full mortgage. What are the next steps we should be taking to make sure it is all done with (paperwork/legal/liability/insurance/anything else you can think of?).
Make sure that all applicable tax and insurance mailings are sent to you rather than the mortgage company/servicer; either set up said payments to get taken care of automatically or set reminders on your calendar to ensure you're not late on the payments. It might be a good time to shop around on home insurance.
posted by Candleman at 9:16 PM on July 6, 2016 [2 favorites]
posted by Candleman at 9:16 PM on July 6, 2016 [2 favorites]
When the loan is completely paid, they will give you a document called a Satisfaction of Mortgage. One will also be filed with the county. But, if the county ever loses their copy make sure you keep yours to prove the loan is paid off.
Congrats!
posted by littlewater at 9:30 PM on July 6, 2016 [4 favorites]
Congrats!
posted by littlewater at 9:30 PM on July 6, 2016 [4 favorites]
(Small aside: It's not called "Satisfaction of Mortgage" in all states so don't be alarmed if it doesn't have that name. In Texas, it is a "Release of Deed of Trust." In Washington State, it is "Deed of Reconveyance." They'll send a copy of whatever the document is called to you with a letter that says "congratulations" at the top. So, by the way, congratulations.)
You may have to pay your ex-mortgage company back for the filing fee to record the release of lien document. Watch for this on your last statement, especially if you pay by automatic payment. If you don't see it, you may get a separate bill. If you miss that bill, it can be reported as a late payment if you don't.
Other than no longer having a mortgage payment, nothing changes. If you had an escrow account, you don't any more. The treasurer of taxes for your jurisdiction will mail tax statements directly to you. In some circumstances, you will receive bills from different jurisdictions. Your homeowner's insurance company will also bill you directly. Be sure to pay these, of course. (If, obviously, you didn't have an escrow account, then nothing changes.)
Call your homeowner's insurance company and tell them to remove your ex-mortgage company as the "loss payee." That way, if you do need to make a claim, you won't have to chase the ex-company for a signature.
You will likely receive a stack of promotional offers saying they can get you a "clean deed" or "ensure that your mortgage is properly recorded as paid." Do not fall for these. If you have any questions, your ex-mortgage company and your area's recorder of real property records can and will assist you for free.
posted by fireoyster at 9:54 PM on July 6, 2016 [12 favorites]
You may have to pay your ex-mortgage company back for the filing fee to record the release of lien document. Watch for this on your last statement, especially if you pay by automatic payment. If you don't see it, you may get a separate bill. If you miss that bill, it can be reported as a late payment if you don't.
Other than no longer having a mortgage payment, nothing changes. If you had an escrow account, you don't any more. The treasurer of taxes for your jurisdiction will mail tax statements directly to you. In some circumstances, you will receive bills from different jurisdictions. Your homeowner's insurance company will also bill you directly. Be sure to pay these, of course. (If, obviously, you didn't have an escrow account, then nothing changes.)
Call your homeowner's insurance company and tell them to remove your ex-mortgage company as the "loss payee." That way, if you do need to make a claim, you won't have to chase the ex-company for a signature.
You will likely receive a stack of promotional offers saying they can get you a "clean deed" or "ensure that your mortgage is properly recorded as paid." Do not fall for these. If you have any questions, your ex-mortgage company and your area's recorder of real property records can and will assist you for free.
posted by fireoyster at 9:54 PM on July 6, 2016 [12 favorites]
Oh, and once the release of lien is filed, the county will mail you the stamped document. As littlewater says, keep this in your collection of important documents alongside the deed you received when you bought the property.
You may also want to consult with an estate planning professional about putting your property in a living trust or some other form of protective legal formation. A paid off house can be a target of lawsuits if it comes to that.
posted by fireoyster at 9:56 PM on July 6, 2016
You may also want to consult with an estate planning professional about putting your property in a living trust or some other form of protective legal formation. A paid off house can be a target of lawsuits if it comes to that.
posted by fireoyster at 9:56 PM on July 6, 2016
The suggestion of redirecting the former payments to savings is a good one. There will always continue to be things that fail or fall apart and need to be replaced, improvements needed, etc.
posted by megatherium at 4:23 AM on July 7, 2016 [2 favorites]
posted by megatherium at 4:23 AM on July 7, 2016 [2 favorites]
We had a little party and burned some paperwork in our fire pit. If taxes and homeowner's insurance were escrowed they're now your responsibility. Have fun, having no mortgage is great.
posted by fixedgear at 5:46 AM on July 7, 2016 [1 favorite]
posted by fixedgear at 5:46 AM on July 7, 2016 [1 favorite]
We started getting a nice discount on our house insurance once the mortgage was paid off. I suppose maybe they thought we'd care about the house more, now that we were mortgage-free?... or that we'd simply stop buying insurance once that we weren't legally required to have it? I dunno. But anyway, check with your insurance and see if you can get a better rate.
posted by Mary Ellen Carter at 6:56 AM on July 7, 2016 [6 favorites]
posted by Mary Ellen Carter at 6:56 AM on July 7, 2016 [6 favorites]
The Registry of Deeds -- or whatever it's called where you are -- may not send you anything. In MA, they don't; you can go online and print out the deed from their website.
posted by Kirth Gerson at 7:53 AM on July 7, 2016
posted by Kirth Gerson at 7:53 AM on July 7, 2016
When we paid off our mortgage, we had to call the bank and ask for the paperwork. So few mortgages run the full term that they seemed a bit confused. We borrowed the same sum again at a much lower interest rate and for a shorter term as a homeowner loan to finance some home maintenance.
posted by SemiSalt at 5:03 PM on July 7, 2016
posted by SemiSalt at 5:03 PM on July 7, 2016
If your property taxes and home owners insurance were paid through escrow make sure you put that money away. A good savings or automatic draft to put money away for house and appliance repair helped me a lot. A friend once told me the life of most appliances/heating and air/roofs are about 15 years. Boy were they right, lol.
posted by PJMoore at 5:23 PM on July 7, 2016
posted by PJMoore at 5:23 PM on July 7, 2016
Response by poster: Thank you all for these great answers, we are working on this right now.
posted by metajim at 11:00 AM on August 1, 2016
posted by metajim at 11:00 AM on August 1, 2016
This thread is closed to new comments.
It might be worth the peace of mind to pay a lawyer to make sure all loose ends are tied up?
If I were in the same position, I would try to stave off 'lifestyle inflation' by redirecting the mortgage payment to another worthy cause, like a savings account, or to pay down any other debt.
posted by freethefeet at 9:08 PM on July 6, 2016 [1 favorite]