You've paid off your mortgage loan, and you're ready to celebrate. But before you do that, you first need to officially inform your county's land records office that you have finished paying back your loan. Do this correctly, and you will receive your mortgage note or deed of trust.
When you initially closed your mortgage loan, you had to sign several legal documents. Two of these were the promissory note and the mortgage, also known as the deed of trust. The promissory note served as your written promise that you would repay your mortgage loan over a set period at a set interest rate. The mortgage or deed of trust is then filed with your county office of land records, where it remains until you pay off your mortgage loan.
Certificate of Satisfaction
Once you've made your last mortgage payment, it's your responsibility to make sure that your mortgage note or deed of trust is released from your county's office of land records. You can do this by filing a certificate of satisfaction. Some lenders do this for their clients. Others just send their borrowers the original promissory note with the marking "paid and canceled" on it.
Releasing Your Deed
If your lender does not send a certificate of satisfaction to your county's office of land records, you will have to take action to release your mortgage deed. Don't simply box away your returned promissory note and celebrate. Your lender might have sent you the certificate of satisfaction along with the promissory note. If so, make sure to contact your county government to determine what steps you need to take to get your mortgage deed released.
Remember, too, that just because you have paid off your mortgage loan, this doesn't mean that you're no longer responsible for property taxes and homeowners insurance. Many homeowners authorize their mortgage lenders to collect extra funds with each mortgage payment to put in escrow. Lenders then tap these funds to pay homeowners' property tax bills and, sometimes, homeowners insurance payments. Once you pay back your lender, that lender will return to you any funds left in escrow. It is then your responsibility to make your own property tax and homeowners insurance payments.
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.