After years of recurring expenses, many view their final mortgage payment as a tremendous cause for celebration. Once a mortgage has been completely paid off by the borrower, the deed to the house will be transferred from the lender to the homeowner. This process, referred to as a release of mortgage, is relatively straightforward and does not require excessive work or effort by the borrower. Receiving title deeds after paying off a mortgage is a simple as presenting the appropriate paperwork to the mortgage officer in charge of the loan.
TL;DR (Too Long; Didn't Read)
If your mortgage is paid off, what happens to house deed is a matter of public record. After presenting paperwork verifying that you have completed your repayment, the lender overseeing your repayment is required to present you with the deed to your property.
The Basics of a Mortgage Deed
When a homeowner takes out a mortgage to pay for a home purchase, they are essentially allowing their lender to buy their property for them and then gradually transfer ownership through recurring payments. Depending upon the specifics of the loan, this repayment period could last for several decades. As a borrower makes payments on their property, they slowly begin to build equity, or ownership, in their property. The more a borrower pays back to their lender, the greater their equity stake in their property.
It is only after the principal and interest on a mortgage loan have been fully repaid that a homeowner acquires 100 percent of the equity in their property. Until this point, their lender will retain partial ownership in the property. The deed for the home will remain in the possession of the lender until the final payment is made.
Transferring the House Deed
The deed is a legally enforceable declaration of the current owner of a property. During repayment, the deed will remain in the possession of the lender due to the fact that they maintain ownership of the home. After the final payment, the lender will be required by law to list the former borrower as the owner of the home and transfer the deed to them.
Necessary Documents to Obtain Deed
If you have completed your final mortgage payment, now is the time to secure your deed from your lender. In order to get started, you will need to collect your mortgage loan paperwork that shows your remaining balance has been paid in full. This documentation will significantly expedite the process of receiving title deeds after paying off mortgage obligations. You can also bring your bank statements illustrating that the final mortgage payment has been transferred.
With this documentation, you should contact your lender and request a release of your deed. You will also need to make sure you request and complete the official release of mortgage statement, which verifies that no further debts are to be collected on your property.
Double-Checking Official Ownership
After presenting this documentation, your mortgage lender will be legally obligated to release the deed of your property to you. Once you have received this paperwork, your next step should be to visit your nearby register of deeds office. Here, you can double-check that all debt burdens pertaining to your property have been erased.
Ryan Cockerham is a nationally recognized author specializing in all things innovation, business and creativity. His work has served the business, nonprofit and political community.