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Paying off a mortgage is quite an achievement. It symbolizes full property ownership and can show that you are financially independent. A free and clear house is a significant investment and asset and can be used in a variety of ways. However, in order to successfully terminate the mortgage process, you must be careful to complete all of the steps required. This is a rather straightforward procedure, but it is critically important for your credit and finances.
Accurate Payoff Statement
Before you make a final payment, contact your mortgage lender and request an actual payoff statement. This statement will show the exact amount due, with interest, and it will have a payoff date and a per diem. The per diem will reflect the amount you will need to add to the final figure for each day after the payoff date. An accurate payment is necessary for a complete payoff of the mortgage.
It is important to speak with your bank and your lender so that you both know when and how the payoff will be made. Keep track of any electronic disbursements from your account and keep in touch with your lender as it is processing. You may even want to ask your loan officer to contact you to tell you when the payment arrives, just so that you have peace of mind that the payment clears before the payoff expiration date.
Paid in Full
After the payment clears your account and finalizes your mortgage, you need to either meet with your lender or speak with a loan officer about retrieving your paid-in-full mortgage agreement and the actual title to your home. While a mortgage is attached to the home, the lender retains the physical title to the property. Ask for these original documents to be mailed to you. You may want to ask for any other documents in your mortgage file, including old income documents and property tax files.
Release of Lien
Once a mortgage is paid in full, it is the lender's responsibility to release the lien to your property. These liens are recorded at your local registry of deeds. However, you will want to visit this registry -- either online or in person -- a few months after you finish paying your mortgage to ensure that indeed the mortgage lien is no longer attached to your home. If it is still there, you need to contact your lender again and ask for an expedited release of lien.
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