Dec 02, 2018 · Mortgage Note and Trust Deed. When the mortgage loan is paid in full, the lender should cancel and return the mortgage promissory note you signed when you took out the loan. This proves you have fulfilled the terms of the loan, and that you no longer owe the lender any money. You may also receive the cancelled trust deed,
Thank you in advance for your assistance in this very important matter. First, congratulations on paying off your mortgage. Paying off any debt is worthy of a celebration. Paying off a mortgage, especially if you’ve owned the home for a substantial period of time, say 15 or 30 years, is even more remarkable.
These documents, such as the deed, security instrument and release documents, come together to create what’s called the title report. You’ll actually get the deed when you buy the home; it’s the release document that shows you’ve paid off the mortgage.
Not Asking If There’s a Prepayment Penalty. Prepayment penalties can be equal to a percentage of a mortgage loan amount or the equivalent of a certain number of monthly interest payments. If you’re paying off your home loan well in advance, those fees can add up quickly. For example, a 3% prepayment penalty on a $250,000 mortgage would cost you $7,500.
Pay off your higher-rate debt. It doesn’t make sense to pay off a 4 percent mortgage if you have credit cards accruing at 16 percent or more. Plan for emergencies. A savings account with at least three months’ worth of expenses can help you weather most setbacks.
Get a “satisfaction of mortgage” statement. You should receive this proof from your lender that …
Directing excess cash towards paying down a mortgage means those funds aren’t available for investing. Opportunity cost. By paying off your mortgage early, you’ll save on the additional interest expense that would have been incurred in your regular payments. This savings can be significant, and will increase with the prepayment amount.
When you took out your mortgage, your lender had a lien placed on your home to have your home serve as security in case you failed to make payments under your loan. Once you pay off your loan, the release of lien tells the world your property is no longer encumbered by that lien. To summarize,
By eliminating interest payments, you gain, in effect, an equivalent risk-free return. That 4% you used to pay to the lender is now 4% back in your pocket. Investing the money — rather than paying off your mortgage — may give you a higher return, especially in tax-advantaged or tax-free accounts.
What You Need to Do After Paying Off Your Mortgage. These documents are usually recorded in your local county clerk’s office. Before you burn your mortgage papers, you should check to be sure that your deed of trust has been released from the land records. In order to do this, you have to file a paper with your county to release the deed of trust.