When one pays off a mortgage, what are tasks that one should do? I know that the the lender is supposed to submit some paperwork such that one receives an indication that the title is free of the lien. (how long does this take? does one have to do anything as part of the process or just wait for the notice to be received?)

And then using that, update the home insurance policies.

What else should be / is recommended to be done? Anything else?

Ensure you stop any automatic payment to the lender/bank, if that is the case.

You will have to arrange to pay the property tax yourself. It was probably being paid by the mortgage company from your escrow. Contact the county assessor or look at their website to see how to accomplish this where you live.

In Texas I did nothing, I was already paying property taxes myself. It was nice having a house paid off even though I could lose it if I do not pay my taxes on it.

I've paid off two mortgages and didn't do anything. In both cases, tax bills already came to me so that was a non-issue. Just check to make sure your county clerks office and insurance company receives a Release of Lein from the mortgage company. Usually takes a month or so.

quote:

Originally posted by Fly-Sig:
You will have to arrange to pay the property tax yourself. It was probably being paid by the mortgage company from your escrow.

Same with your homeowner's insurance, if it was being paid out of escrow too.

Thanks.

1. Stop auto payments (I thought that this would be automatic since there is no balance left; I'll look into it. It's checking and mortgage linked accounts in the same bank.).

2. Property taxes / Insurance: already self paid. No escrow.

3. Confirm w/ county clerk and insurance companies - receipt of Release of Lien.

4. Done?

Make sure you talk to your lender about your intent before sending them the check. My lien holder has historically applied any intended additional principal payment to escrow rather than reducing the loan balance.

Note also that the balance on your statement does not always accurately indicate the payoff amount for a variety of reasons (e.g. if interest accrues daily). Call your lender for the exact figure. And don't forget to insist that your unexpensed escrow balance be refunded immediately or applied to the payoff, otherwise, they may hang on to it for months.

With the loan paid off you will be responsible for paying real estate taxes and insurance out of pocket rather than your lender paying them from escrow. Review your insurance coverage, the premium may be different on a mortgage-free home.

quote:

Originally posted by architect:
Review your insurance coverage, the premium may be different on a mortgage-free home.

Good to know. Thanks.

We added a separate savings account just for property taxes and home insurance and put a set amount into the account every month. That way we make sure we have the money to pay for the following year. Not that we have an issue saving but it makes life easier.

quote:

Originally posted by architect:
Make sure you talk to your lender about your intent before sending them the check. My lien holder has historically applied any intended additional principal payment to escrow rather than reducing the loan balance.

Note also that the balance on your statement does not always accurately indicate the payoff amount for a variety of reasons (e.g. if interest accrues daily). Call your lender for the exact figure. And don't forget to insist that your unexpensed escrow balance be refunded immediately or applied to the payoff, otherwise, they may hang on to it for months.

Yes, call for a payoff quote, which will be a valid number through a date certain. They will tell you by when it must be received.
Follow up with another phone call requesting confirmation and a written release, but that should be automatic.

quote:

Originally posted by konata88:
1. Stop auto payments...

2. Property taxes...

3. Release of Lien...

4. Done?

Yes!

Now enjoy the peace of mind that comes from not living in the bank's house.

When I paid mine off last year I had to have my bank do a wire transfer to the lender for the final payment. Regular payments were made through the lender's web site but the final one had to be wired. The lender notified the county and they started sending the tax bill directly to me. The only thing I had to do was call the insurance company and have them start billing me instead of the escrow.

The other thing I did was set up a separate savings account at my bank and automatic transfers (monthly) into it from my checking. Now the tax and insurance payments are made from that account. Sort of a self-administered escrow account just to help ensure that I don't brain-fart and spend the tax and insurance money elsewhere.

Congratulations.

One unexpected surprise from paying off my mortgage was that my credit score went down. Go figure but I was no longer carrying any debt.

I always thought that was just wrong.

Good job and it’s a great day!!!

Heh. Yeah my score went down too. The thing is though, I don't give a shit anymore!

quote:

Originally posted by .38supersig:
Now enjoy the peace of mind that comes from not living in the bank's house.

It is certainly a good position to be in. The only problem is that now you get to rent your home from the county.

You should get a document from the mortgage company saying that the mortgage is paid in full.
Make a couple of copies just in case .
I went to the Clerk Of Court's office and got a certified copy of the title.

quote:

Originally posted by Gustofer:

quote:

Originally posted by .38supersig:
...not living in the bank's house.

The only problem is that now you get to rent your home from the county.

Been renting from the county since 2003. I'm fine with that.

Okay:

1. Stop auto payments (I thought that this would be automatic since there is no balance left; I'll look into it. It's checking and mortgage linked accounts in the same bank.).

2. Property taxes / Insurance: already self paid. No escrow.

3. Confirm w/ county clerk and insurance companies - receipt of Release of Lien.

4. Release of Lien and/or Deed of Reconveyance from Clerk of Court

If you had an escrow account you’ll want to know the balance and find out how soon you can expect your money to be returned to you.

Some mortgage companies take their sweet time with this so you’ll want to stay on top of it.