What Is Satisfaction of Mortgage?

Paying off your mortgage, whether it's due to a refinance, sale or sending a pay-off check to the mortgage company, is an exciting and sometimes hectic time. You have to work directly with the lender to gather any required paperwork to make things official. One document you'll need to receive is a satisfaction of mortgage.

What It Is

A satisfaction of mortgage is a document generated by a mortgage lender. It confirms that the lender no longer has any control over or ownership of the property because the loan is paid in full. When you receive this document, you have to file it with your local county office (sometimes the lender sends it directly to the county clerk) so that the town clerk can update your property deed. It's your proof that you own your home free and clear. Keep it in a very safe place, like a safety deposit box.

Getting It

The process of getting your satisfaction of mortgage document is sometimes a challenge. For one, you have to confirm that you've paid the entire balance remaining on the loan. That may include unpaid late fees or additional fees required by the lender. When your balance is at zero, you must then wait for the mortgage company to generate and mail the document to you in the mail. It can take several weeks or more to receive your satisfaction of mortgage paperwork.

Why You Need It

The satisfaction of mortgage document comes in handy in a number of situations. If you ever need to prove that you own the home free and clear, you have to show the satisfaction of mortgage. For instance, if you try to take out a business loan in the future using your home as collateral, you may have to provide this document as proof. It's also important for estate planning, when making arrangements to pass your property onto loved ones as an inheritance.

Additional Considerations

Receiving a satisfaction of mortgage also indicates that you have paid off one of your largest debts. This is reflected in your credit history. After issuing the satisfaction of mortgage, the lender must note your account as "closed" or "paid" on your credit report. But keep in mind that this may not improve or affect your credit score at all. This is because maintaining an open installment loan like a mortgage is a good thing for your credit score. Closing it could actually cause the score to go down slightly.

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About the Author

Louise Balle has been writing Web articles since 2004, covering everything from business promotion to topics on beauty. Her work can be found on various websites. She has a small-business background and experience as a layout and graphics designer for Web and book projects.