So what happens next?
<p class = "canvas-atom-canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "There are a number of important documents that you could receive By mail, and there are some responsibilities you will have to assume now that no bank has any privilege on your home, however, the exact process will vary depending on your condition, mortgage lender and type of mortgage. Here's what to look for once you're done paying off your mortgage. "Data-reactid =" 24 "> You can receive several important documents in the mail and you will have to assume some responsibilities.final now that no bank has any privilege on your house, but the exact process will vary according to your state , mortgage lender and type of mortgage. Here's what to look for once you have finished paying off your mortgage.
What documents do I receive after paying off my mortgage?
You may be wondering what happens when mortgages are repaid and if you will officially receive title to your home. In fact, the first thing you should look for after paying off your mortgage is a letter that your lender has mailed to you, containing several key documents related to your loan.
<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Documents that can be released after paying your house"data-reactid =" 27 ">Documents that can be released after paying your house
- A statement that your balance is fully paid
- Your ticket canceled
- A certificate of satisfaction
- Your mortgage or deed of trust canceled
When you first took out your mortgage, you signed a promissory note in which you promised to repay your loan in a number of years and at a certain rate of interest. For all intents and purposes, that's what we actually call when we say we take out or pay off a mortgage.
Your mortgage – or in some states your "deed of trust" – is the document that gives your lender a legal interest in your property. Your lender should have deposited it with your city or county land registry office after you took out your loan.
How can I get the act at my house?
Once you have repaid your loan, your lender should mail you your original promissory note with the words "Paid and canceled" or something similar to indicate explicitly that you have satisfied your debt. At about the same time, the lender may also have sent a certificate of satisfaction to your city or county office, which then releases your mortgage or deed and updates their records to show that you are there. sole owner of your home.
However, not all lenders publish original documents, and some do so very slowly. Your lender can send you the certificate of satisfaction instead of or in addition to your promissory note. If this is the case, you will need to personally file it with your local archives office. In either case, it is your responsibility to check with your local office that your mortgage has been released and that no lender has a lien on your home.
If your mortgage included a line of credit in equity, your lender might not cancel your mortgage because you could still take out a loan against your mortgage. In this case, you may need to contact your lender to request the termination of your loan agreement.
If you have not received your canceled promissory note or your lender's satisfaction certificate within a few weeks of your final payment, contact your lender to request disclosure. It is in your interest to obtain and keep the original documentation relating to your mortgage. However, the most important step is to check with your local archives office that your mortgage has been canceled.
<p class = "canvas-atom-canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "In addition to contacting your records office, you can want to create a credit report as a second confirmation that no current mortgage is associated with your name, which can be done for free once a year from each of the three major credit bureaus. AnnualCreditReport.com. "data-reactid =" 40 "> In addition to contacting your records office, you may wish to generate a credit report as an additional confirmation that no current mortgage is associated with your name. can do it for free once a year with each of the three major credit bureaus at AnnualCreditReport.com.
What am I responsible for now that I paid my house?
When you closed your home, your lender has probably forced you to agree to pay an additional amount each month, which was paid into an escrow account to pay property taxes and homeowner insurance premiums on your behalf. Now that you, the borrower, have repaid your loan and have become the sole owner of a property, you will have to assume those responsibilities yourself.
Fortunately, your mortgage lender may have asked you to pay a little more than what is required to pay these bills. If surplus funds were left in your escrow account after you submitted your last mortgage payment, your lender should send you a check for that amount. Be sure to ask your lender when you have an amount left in your escrow account and when you will receive your refund.
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We recommend you deposit this refund in a bank account that will serve as a monthly repository for your real estate expenses. Next, determine the amount your lender put in your escrow account each month and start storing an equivalent amount in your own bank account. In this way, you will never be surprised by a heavy tax bill.
Do you still pay property taxes after paying your house?
Now that no lender submits property taxes on your behalf, you must pay them directly, in accordance with the property tax laws of your state or municipality. States and counties levy property taxes differently, with some regions requiring payment only once a year, while others require them quarterly. Look for the property tax laws in your area to determine where and how often to submit your payments.
Update your home insurance policy
Once you have verified that your mortgage or trust deed is canceled, contact your homeowner insurance company and inform them that you are the sole owner of the insured property. This is an important step because any named insurance taker is entitled to a payment if you file a claim for homeowner insurance. If your home is damaged and you file a claim, the fact that your former lender is listed on the policy may result in your insurance company sending the lender a portion of the claim amount. This will only cause delays and frustration for you, especially if you have paid a large amount for repairs in anticipation of a refund. In addition to updating the named owners in your policy, be sure to set future premiums to deduct from your own bank account.
You may be wondering if you still need home insurance, since it was only required by your lender. Although the homeowner's insurance is not taxed by the federal government, we strongly recommend that you do not cancel your policy.
Home insurance offers protection against liability if a person is injured on your property and against a number of perils that could significantly harm your home. Without insurance, an accidental fall or dog bite could make you responsible for a hefty lawsuit. Likewise, a fire or other disaster could leave you on the hook for the total price of your home and all your belongings. Such a loss may be greater than what you could recover, especially if you are nearing retirement.
<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Fortunately, many insurance companies offer discounts important steps, such as paying off your mortgage or retiring. Ask your insurer if you qualify for a discount. If you do not, consider comparing quotes from a few insurers in your area to find a more reliable solution. affordable policy"data-reactid =" 55 "> Fortunately, many insurance companies offer discounts important steps, such as paying off your mortgage or retiring. Ask your insurer if you qualify for a discount. If you do not, consider comparing quotes from a few insurers in your area to find a more reliable solution. affordable policy.
## What to do with this extra money each month
Now that you no longer need to make mortgage payments, you will have a cash surplus each month. You might be tempted to use these funds to offer you a new toy or vacation that you want and, certainly, you deserve it. Few people stay long enough in the same house to see the end of their mortgage. However, there may be other financial obligations that you should consider settling before splurging. Here are three things you should consider doing with this extra money.
Pay off other debts
If you have finally paid off your mortgage debt, keep up the momentum by applying your monthly mortgage payment to other debts. Start with high interest rate debt, such as outstanding credit card balances. Once this debt is paid, go to debt at the highest interest rate, like any car payment or student loan for which you are responsible. Becoming without a mortgage is a liberating experience, but becoming totally debt free is even better.
Complete your emergency fund
Every family should strive to build a security fund that can cover unforeseen medical emergencies, expensive home repairs, or expenses for four to six months in the event of a job loss. If you do not already have such a fund or if it is not capitalized enough, redirect your old mortgage payment here until you have registered your target amount.
Catch up retirement savings and other investments
<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "If you have settled all your debts and accumulated a fund of Emergency, your next priority should be to make sure that you are on the good road for retirement. If you are not already, use your extra money to maximize your annual contributions to the IRA. Each individual under the age of 50 is allowed to invest up to $ 5,500 in a Roth or traditional IRA in 2018, and each individual over the age of 50 is allowed to pay $ 6,500. Similarly, if your employer offers a 401 (k) program with professional correspondence, be sure to contribute enough to earn at least the maximum match. "Data-reactid =" 63 "> If you have settled all your debts and built an emergency fund, your next priority should be to make sure that you are on the good road for retirement. If you are not already, use your extra money to maximize your annual contributions to the IRA. Each individual under the age of 50 is allowed to invest up to $ 5,500 in a Roth or traditional IRA in 2018, and each individual over the age of 50 is allowed to pay $ 6,500. In addition, if your employer offers a 401 (k) program with professional correspondence, make sure you contribute enough to earn at least the maximum match.
In addition to retirement savings, many families have other goals in terms of investing and saving, such as funds for a new car or the tuition of their children. Once you have determined that your retirement savings are on the right track, consider strengthening these investments.
Once your financial priorities are in order and you have settled all your debts, reward yourself for having passed all these milestones. Take a trip with your loved ones or get involved in a charity that is important to you. You have worked hard to get where you are. Take the time to enjoy it.