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Paying off mortgage: what do I need to do or ask or say with final payment?

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  • Paying off mortgage: what do I need to do or ask or say with final payment?

    Sorry if this is a dumb question, but I am about to send a mortgage payment and become totally debt free. Regardless of how you feel about keeping a mortgage (not my question here) what should I do / say /wording with my last payment. I will obviously say to "apply this check to principal" but should I also request something else?
    Sorry for my ignorance but is there a deed or title or do I need to say: close this account please? Seems like with my condo I had to get the deed in my name at the court house or something?
    Thanks for the help, sorry for being a dumb doc.
    Last edited by Tangler; 08-09-2020, 08:55 AM.

  • #2
    The mortgage company has a lien filed. They need to file a lien release with the county. Confirm with them their process an verify it is filed with you County.
    Insurance, take them off of your policy as a loss payee.

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    • #3
      Originally posted by Tim View Post
      The mortgage company has a lien filed. They need to file a lien release with the county. Confirm with them their process an verify it is filed with you County.
      Insurance, take them off of your policy as a loss payee.
      Tim, you are a smart critter! Thanks!

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      • #4
        Congratulations!

        It has nothing to do with applying to principal. You'll have to pay the remaining principal plus any accrued interest since your last payment before your lender files the lien release. Ask them what your loan payoff amount is and then pay the whole amount (including accrued interest) immediately before more interest accrues. The release process may take a few weeks to months, you should get some paperwork in the mail.

        Like Tim said, remember to call your property insurer and have them removed as a lien holder. You'll likely have to have the lien release paperwork in hand and/or the insurer may contact the lender for confirmation of payoff.

        What a great feeling. You'll love the extra cash flow. Just paid off my office building, hopefully debt free for good.

        Payoff makes you a smart doc.

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        • #5
          congrats....Ask for final payoff amount

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          • #6
            If your bank is local, do it in person. Great feeling saying it to the teller ?

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            • #7
              The mortgage company should acknowledge the loan payoff pretty quickly. There is typically a statement about them notifying the relevant county office. Chances are it will take a few months to receive the lien release from the county. That’s normal, but still a nice feeling when you get the deed in the mail with the lien removed!

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              • #8
                Originally posted by StarTrekDoc View Post
                If your bank is local, do it in person. Great feeling saying it to the teller ?
                Typically the emotional transaction is zero sum, the more singing and dancing you do, the more depressed the teller feels.
                Dancing and celebrating is allowed. Try blasting this as you strut your stuff and even the branch manager will shed a tear. Time to shine!

                https://youtu.be/3GwjfUFyY6M

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                • #9
                  Congratulations! I have dreams about eventually reaching that day!

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                  • #10
                    Pay it off in person in coins. There is a coin shortage so I think the bank would be appreciative for the extra coins.

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                    • #11
                      My loan was with my bank, so I trundled down there and asked for a banker and asked him to calculate the amount I owed and to move it over from my checking account. As is often the case, I probably looked undomiciled given how I dress when I run errands like that; so it was fun watching his expression. Probably shouldn't quit his job to join the poker circuit.

                      It ended being overpaid by like $7, so I got a check in the mail from them. I got a letter that I was paid off, but don't recall getting anything else. Is there a document that I need?

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                      • #12
                        Originally posted by G View Post
                        I got a letter that I was paid off, but don't recall getting anything else. Is there a document that I need?
                        Keep the payoff letter in your files, or scan and save it on your computer. And then ask the bank if they filed a lien release. And finally call the county clerk and confirm that the lien has been released.

                        This was an issue for us once in the past. We got a paid off letter from the bank on a prior home when we finished paying off the mortgage. When we went to sell, the bank had not done the lien release with the county. We showed the payoff letter to the title company and they still wanted to hold funds in escrow until the mortgage payoff was proven. We bluffed and said fine, we will wait, you can delay the closing until you prove the lien is released, so they did agree to close with just the bank letter.

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                        • #13
                          Originally posted by White.Beard.Doc View Post

                          Keep the payoff letter in your files, or scan and save it on your computer. And then ask the bank if they filed a lien release. And finally call the county clerk and confirm that the lien has been released.

                          This was an issue for us once in the past. We got a paid off letter from the bank on a prior home when we finished paying off the mortgage. When we went to sell, the bank had not done the lien release with the county. We showed the payoff letter to the title company and they still wanted to hold funds in escrow until the mortgage payoff was proven. We bluffed and said fine, we will wait, you can delay the closing until you prove the lien is released, so they did agree to close with just the bank letter.
                          Awesome. I was able to find this online in 2 minutes and download it. (I assume it is the deed of reconveyance that I need?) Thanks so much!

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                          • #14
                            Originally posted by G View Post

                            Awesome. I was able to find this online in 2 minutes and download it. (I assume it is the deed of reconveyance that I need?) Thanks so much!
                            Yes, the "deed of reconveyance" means that the mortgage has been paid off.

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                            • #15
                              Originally posted by White.Beard.Doc View Post

                              Yes, the "deed of reconveyance" means that the mortgage has been paid off.
                              Thank you, brother. As an aside, it is amazing how much stuff is in that county website. I mean, it is a treasure trove for a plaintiff's attorney!

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