You've paid off your mortgage loan. It's a time for celebration. But it's not time to put away your checkbook. You'll still face regular bills associated with your house. You just won't be sending your money to your mortgage lender.
Even after you pay off your mortgage loan, you'll still have to pay your property tax bill. If you previously paid this bill through the escrow process -- meaning that your monthly mortgage payment included money for property taxes that your lender paid on your behalf -- you will now have to make these payments on your own.
Mortgage lenders require you to take out, and pay for, homeowners insurance before they'll lend you money. It's a sound financial decision to keep your homeowners insurance even after you pay off your mortgage. Could you afford to replace your home if a natural disaster destroys it? Could you afford to replace your most valuable possessions should a burglar steal them? If not, then you should keep your homeowners insurance.
Homeowners Association Fees
If you live in a condominium development or certain single-family-home developments, you might have to pay homeowners association fees to cover the costs of exterior maintenance, repairs and common-area upkeep. These fees do not stop just because you've paid off your mortgage.
There are plenty of other costs associated with owning a home and you've likely been paying them right along. You don't get a discount on garbage pickup, utilities or repairs just because you've paid off your mortgage. And now you don't get the tax deduction for mortgage interest. On the other hand, you do have a bit more money in your pocket for these expenses.
Don Rafner has been writing professionally since 1992, with work published in "The Washington Post," "Chicago Tribune," "Phoenix Magazine" and several trade magazines. He is also the managing editor of "Midwest Real Estate News." He specializes in writing about mortgage lending, personal finance, business and real-estate topics. He holds a Bachelor of Arts in journalism from the University of Illinois.