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Paying off your mortgage is a major milestone in homeownership. Making that final payment means years of hard work have finally paid off – your home is 100% yours. But even after you pay off your mortgage, there are still a few steps required before you officially hold the title to your property. Let’s walk through what happens after you pay off your mortgage and how you get the title.
What Happens When You Pay Off Your Mortgage?
When you first get a mortgage, the lender places a lien against your home. This gives them a legal claim on the property as collateral until you repay the loan. While you make payments over the years, you have equitable title, meaning you have the right to use and control the home. The lender holds legal title.
Once you pay off the mortgage, the lender’s lien is removed through a document called a satisfaction of mortgage or deed of reconveyance This releases their legal claim But it doesn’t automatically transfer full ownership to you.
To get the title after paying off your mortgage, you need to take one extra step – recording the satisfaction of mortgage with your county recorder’s office. This makes it officially part of the public land records. Now you hold both equitable and legal title. The home is 100% yours!
How to Get a Satisfaction of Mortgage
Within 30-60 days after your final payment the lender is required to provide a satisfaction of mortgage. If you don’t receive it follow up to request it. There are a few ways lenders can handle this
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Send it directly to you. Review it carefully for any errors before recording.
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Record it themselves. They’ll let you know when it’s completed.
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Send to the title company. If you sell the home before paying off the mortgage, the title company handles the process.
Be sure to keep the original document in a safe place along with your other important homeownership records.
Recording the Satisfaction of Mortgage
To complete the title transfer process, the satisfaction of mortgage must be recorded with the county. This enters it into the public land records. Follow these steps:
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Get it notarized. Most counties require the document to be notarized before recording.
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Record it. Take the original to your county recorder’s office. Pay the filing fee (usually $15-$30).
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Get copies. Request a few certified copies of the recorded document for your records.
Once recorded, you’ll receive the official title to your home! Check with your county clerk’s office if you ever need additional copies.
What if You Can’t Get a Satisfaction of Mortgage?
If months pass after paying off your mortgage and you can’t get a satisfaction of mortgage, don’t panic. You have a few options:
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Contact the lender. Inform them in writing and request the document. The lender could face penalties for not providing it.
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Try the mortgage servicer. Your original lender may have transferred servicing rights to another company. Contact them for help.
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Consult an attorney. They can help legally compel the lender to produce the satisfaction or clear up any title issues.
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Get an affidavit. Your county may allow recording an affidavit stating your mortgage was paid off.
As long as you have proof you paid the mortgage, you shouldn’t worry about any claims against the home. But satisfy any title issues promptly before selling.
Why Record the Satisfaction of Mortgage?
You’re probably wondering why it’s necessary to record the satisfaction of mortgage if you already paid off the loan. There are a few key reasons:
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Proves clear title. This verifies to future buyers that there are no liens or claims.
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Releases the lien. Recording is what legally removes the lender’s claim from your title.
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Complies with laws. Most states require lenders to record mortgage satisfactions.
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Provides closure. After years of payments, recording gives you emotional closure.
While it may seem like an extra hassle, take the time to record the document. Then relax and celebrate your accomplishment of paying off the mortgage!
Other Steps After Paying Off Your Mortgage
Paying off your mortgage is thrilling, but don’t drop your guard as a homeowner just yet. Here are a few other things to do:
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Monitor your credit reports and scores. Paying off a mortgage can cause dips.
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Review insurance needs. You may need to adjust coverage without a mortgage.
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Update wills, trusts, and beneficiaries. Your heirs will inherit the home outright.
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Watch for tax changes. Losing mortgage interest deductions can impact taxes.
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Maintain the property diligently. You’re now fully responsible for repairs and maintenance.
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Budget carefully. Don’t overspend just because you no longer have a mortgage payment.
Owning your home free and clear is an amazing accomplishment. Take time to celebrate before moving on to the next chapter of homeownership! Just don’t forget to record that satisfaction of mortgage and get the title placed in your name.
What’s the difference between a deed of release and reconveyance?
A deed of release legally removes any further obligation to a binding agreement. Mortgage lenders can use it to indicate that you no longer owe mortgage payments, but it can be used in other situations, too, such as between an employer and an employee. The reconveyance deed applies specifically to mortgages.
What is a satisfaction of mortgage?
A satisfaction of mortgage is another name for a deed of reconveyance. It confirms that a borrower has fully repaid their mortgage and that the mortgage lender no longer holds a lien on the home.
What happens when you make your last mortgage payment?
FAQ
What happens to your title when you pay off your mortgage?
A reconveyance deed is a document that transfers the title of a property from the bank or mortgage company to the borrower once they’ve fully paid off the debt.
What paperwork do you receive when you pay off your mortgage?
A reconveyance deed, also known as a Deed of Reconveyance, is a legal document that says you’ve paid off your mortgage completely. It removes the lender’s claim to your property and shows that you are now the full owner.
Where to get home title after paying off a mortgage?
Go to the recorder’s office or county clerk’s office. You’ll be able to get your deed and the satisfaction of mortgage. Those are the 2 docs you want.
What is the paper called when you own a house?
A deed for a house – sometimes known as a property deed – is a written document, typically drawn up by a real estate attorney, that moves property ownership from the seller (grantor) to the buyer (grantee). House deeds are important because they show who has legal ownership interest in a property.