Is An Early Payoff of Your Mortgage Right for You?

Real Estate Agent with RE/MAX Preferred Realty

With interest rates so low and economic uncertainty so high, it is no wonder that many owners of Greenville NC homes are considering paying off, or at least paying down, their mortgages earlier than expected. The topic is a controversial one, however, with real estate and financial experts vociferously arguing about both the advantages and disadvantages of such a move.
mortgageProponents of early pay-offs cite benefits such as a strong sense of financial stability, added housing security, and financial flexibility, whereas opponents point out the loss of liquidity and investment opportunities.  Both sides agree, however, that you should pay off high interest loans first, establish a comfortable emergency fund, and utilize a mortgage calculator to analyze financial gain or loss incurred in the early pay-off of the mortgage on your Greenville NC home.

In the event that you decide that you do wish to own your Greenville NC home free and clear now—or in the near future-- there are steps you need to follow.   First, the process is the same whether you obtained your loan from a bank, a credit union, or a mortgage broker/banker. You signed a promissory note and a deed of trust (or mortgage) which was recorded among the land records in the jurisdiction where your property is located.

Before you send in a check, contact your lender and get a written payoff statement, which will include a per-diem interest. Remember that interest accrues daily, and you have to pay the lender up to the date it actually receives your check.( Many title attorneys actually send the lender a few more days' interest just to be on the safe side. Legitimate lenders will refund any overage.)

After you have paid the lien off, some documentation (release or satisfaction) must be recorded among those same land records reflecting that the loan has been paid in full. Talk to your lender as to its procedure. Most will take care of recording the release for a nominal fee; some will send you the promissory note and deed of trust marked "paid and canceled" and ask you to handle the recording.  Be sure you get the original documents back from the lender.

You should also (1) advise your insurance carrier in writing that you no longer have a mortgage; (2) request the real estate taxing authorities in your jurisdiction send you the original tax bills; and (3) stop any automatic payments with your bank.

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Whether you are considering buying a home, selling a home or both, Liz Freeman knows the Greenville, North Carolina area inside and out.  Most of her team members were born and raised in Pitt County, NC which has provided them with strong ties to the area, allowing them to become a successful Greenville NC real estate team.

Liz Freeman and her team have distinguished themselves as leaders in the Greenville NC real estate market. Liz assists buyers looking for Greenville NC real estate for sale and aggressively markets Greenville NC homes for sale. Liz is also aCertified Distressed Property Expert (CDPE), avoid foreclosure and short sale expert, committed to helping families in financial hardship find options to foreclosure. For more information you can visit Liz You can reach Liz by filling out her online contact form or give her a call.

Comments (1)

Karen Anne Stone
New Home Hunters of Fort Worth and Tarrant County - Fort Worth, TX
Fort Worth Real Estate

Liz, my thought is that it would all depend on the individual situation of the home owner.  IF the mortgage loan interest rate is the lowest of the loans (including credit cards and car loans) that the owner has, it would usually make more sense to pay THEM off, and leave the low-interest mortgage loan just as it is.  Besides, the interest is tax deductible, while the interest on the others is not.  Just my thoughts.

By the way... I have just subscribed to your blog.  I invite you to subscribe to mine.  :)

Jun 19, 2013 05:30 AM

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