Paying off your mortgage is a milestone, a very big deal. Since a mortgage is not actually a loan, but a security instrument provided to a lender, it is a form of collateral. The lending institution records a lien against your mortgaged property to protect itself in the event you, as a buyer, default on mortgage payments. Transfer of title, or deed, on a property requires it to be free from encumbrances, such as liens. Make your deed clear of any mortgage lender liens by following a few simple steps after you fully pay your mortgage.
Pay the mortgage in full. Confirm with the lender that no remaining mortgage balance exists. Establish there are no additional lender charges remaining, such as unpaid late fees or other hidden charges.
Ask that the original mortgage, promissory note and satisfaction of mortgage document be sent to you. Expect this to take several weeks. If your original lender is no longer in business or the mortgage has been sold several times, the verification process is sometimes complicated and time consuming.
Confirm that the satisfaction of mortgage is recorded with the county recorder’s office or registrar of deed’s office. Typically, the lender files the notice, but some lenders leave the recording up to you. The lender also generally notifies at least one credit report bureau of the discharge of mortgage.
Hand-deliver the satisfaction notice document to the recorder’s office or registrar of deeds office if the lender has not recorded it for you. The recorder’s office should give you back the original document you brought into the office, showing the filing date and time stamped and noted on it.
Request an updated deed from the county recorder’s office or registrar of deeds office and verify the information. Check to see that your name is spelled correctly, the legal description and/or address of the property is correct and that your name is the only one on the deed, showing clear title.
Keep the satisfaction of mortgage document, updated deed, original promissory note and any other documentation pertaining to the mortgage in a safe, accessible location. You are now prepared should any issues with taxes, insurance or other questions arise regarding the mortgage discharge.
- Satisfaction of mortgage is documentation from the lender acknowledging the mortgage is fully paid and the lender no longer has any claim on the property.
- Even though you're excited to really own your house, don't burn the mortgage documents as celebration of being paid in full. If you simply must celebrate the traditional way, make copies and just burn them.
Karen Curinga has been writing published articles since 2003 and is the author of multiple books. Her articles have appeared in "UTHeath," "Catalyst" and more. Curinga is a freelance writer and certified coach/consultant who has worked with hundreds of clients. She received a Bachelor of Science in psychology.