4 Things To Consider Doing After Paying Off Your Mortgage

By
Real Estate Agent with RE/MAX Executive | Charlotte, NC


Did you know there are 4 things you should do if you've paid off your mortgage, but are still living in your home? Below, reprinted with the permission of Hutchens Law Firm in North Carolina from their blog, is their recent post about the four things to consider doing after you've made that final mortgage payment. While the first of these suggestions refers specifically to how money is borrowed in North Carolina, the basic advice holds even if you're located in another state.

 

"First of all, Congratulations! Paying off your mortgage is a big event. Signing the check for that last payment is every bit as exciting as signing the papers to buy that first house. But, sometimes, it can also be just as stressful. Below are 4 things to consider after you've made that final payment.

 

  1. Mortgage lien cancellationMake sure the lien on your property is cancelled. When you signed the loan documents, you signed a Deed of Trust. That document gave your lender a lien against your property. Now that you have paid it in full, your lien must be cancelled. If it is not cancelled and you decide to sell or borrow against the property again, the lien will still show on the title search and it may be costly and time consuming to track down your lender (or its successor, if it has gone out of business) to get the lien cancelled down the road.  It is your bank’s responsibility to send the cancellation or release documents to the county Register of Deeds to cancel the lien. In North Carolina, a lender has 60 days from the date the loan is satisfied to file the cancellation documents.  If the cancellation documents have not been recorded within the sixty days, or if they refuse to file it altogether, you should see your attorney. Your attorney will be able to advise you on the next steps to take to make sure that the lien no longer appears of record.


  2. Property InsuranceUpdate your insurance. When you took out your loan, the bank may have requested that your insurance company name them as an additional insured on your homeowners insurance. This is normal and would protect the bank if something catastrophic happened to your property while they had an interest in it. However, once you have paid your loan in full, you are free to remove them as an insured. Doing so ensures that if something should happen to your property, you end up with the insurance proceeds without involving your previous lender. As an added bonus, updating your insurance will give you the chance to evaluate whether the policy you have is right for you. Your lender may have had certain requirements for your policy that you may want to add to, remove, or change such as coverage limits or deductible amounts. Your insurer will have the opportunity to reevaluate your needs and recommend any coverage changes.  


  3. Paying your property taxesPlan to pay your taxes and insurance. If your monthly loan payment included an escrow payment, then your lender has been paying your taxes and insurance on your behalf through the life of your loan. This was convenient for you and the lender – you did not have to come up with lump sum payments once a year and your lender knew that these items were taken care of. However, now that you have paid your loan in full, these items become your responsibility again. You should call your local tax office and your insurance company to get an idea of how much these bills will be so you can budget accordingly.  It is important to remember that you may be entitled to a refund of the cash left in your escrow account as well. Your lender should send you a check for this after your final payment has been processed. If you have not received it within a few weeks of sending your final payment, be sure to check with your lender and request the refund if necessary.


  4. Financial planning after paying off your taxesMake an appointment with your financial planner and your attorney. Paying off your mortgage is a big step and is not something you have to navigate alone. Your financial planner will be able to help you figure out the best way to manage your increased discretionary income and how to budget for the insurance and tax payments you will be taking over. Likewise, your attorney can help you make sure your lien is satisfied and that you are on the right track if you decide to sell your property or borrow against it in the future."
 

 

 

Paid Stamp Image courtesy of Stuart Miles at FreeDigitalPhotos.net

Hands Tearing Apart Document Paper Image courtesy of Sira Anamwong at FreeDigitalPhotos.net

Home Insurance Means Protecting And Insuring Property Image courtesy of Stuart Miles at FreeDigitalPhotos.net

Sign Taxes Means Excise Taxation And Duties Image courtesy of Stuart Miles at FreeDigitalPhotos.net

Businessman Showing Thumbs Up Image courtesy of basketman at FreeDigitalPhotos.net

 

 

This information about The 4 Things You Should Do After Paying Off Your Mortgage  is brought to you courtesy of Nina Hollander and Carolinas Realty Partners, RE/MAX Executive, your Charlotte metro area real estate consultants and residential sales specialists and reprinted with the permission of the Hutchens Law Firm in North Carolina.

 

If you are considering purchasing or selling a home in the Charlotte metro area, I would love an opportunity to earn your business, exceed your expectations, and to prove to you that:

 "The Right Broker Makes All The Difference." 

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SEARCH ALL CHARLOTTE METRO AREA HOMES HERE

 

Nina Hollander, Broker, Realtor / REMAX / Carolinas Realty Partners / Ph: 704.779.0813 / F: 704.341.3346 / E: Nina@NinaHollander.com / W: www.GreatHomesInCharlotte.com

Nina Hollander
Broker, Realtor, CRS, GRI, ABR, SRES, CDPE, SFR, SPS, CMRS
Carolinas Realty Partners with RE/MAX Executive Realty
Direct: 704-779-0813
Website: www.GreatHomesInCharlotte.com
Blog: http://activerain.com/blogs/ninahollander
Search for Charlotte Area Homes: www.HomesInCharlotteArea.com

2007 - 2016 Charlotte Magazine 5-Star Customer Satisfaction Award Winner

 

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Disclaimer:  Nothing in this blog article is to be construed as legal advice, tax advice, or financial advice.  For legal advice see an attorney.   For tax advice or financial advice see a tax attorney, certified public accountant, or other qualified professional.

 

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Tags:
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paying off your mortgage
what to do when youve paid off your mortgage
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Rainmaker
2,393,717
Nina Hollander
RE/MAX Executive | Charlotte, NC - Charlotte, NC
Your Charlotte/Ballantyne/Waxhaw/Fort Mill Realtor

Gabe Sanders ~ good morning, Gabe... I've had clients who were caught in those "cross hairs" because they forgot to ensure their insurance was paid, their lien was cancelled.

Dec 27, 2016 03:49 AM #21
Rainmaker
2,393,717
Nina Hollander
RE/MAX Executive | Charlotte, NC - Charlotte, NC
Your Charlotte/Ballantyne/Waxhaw/Fort Mill Realtor

Kathleen Daniels ~ good morning, Kathleen. I think you get the prize if you had one client who did all four things wrong. I've had people who missed one or two of them, but never all of them!

Dec 27, 2016 03:50 AM #22
Rainmaker
2,393,717
Nina Hollander
RE/MAX Executive | Charlotte, NC - Charlotte, NC
Your Charlotte/Ballantyne/Waxhaw/Fort Mill Realtor

Michelle Carr-Crowe-Top 1% Diamond Certified Real Estate Team Sells Cupertino San Jose Homes-Just Call 408-252-8900 ~ good morning, Michelle... you are right that paying off the mortgage is the goal of many.... but it shouldn't be done in a total financial and legal vacuum.

Dec 27, 2016 03:50 AM #23
Rainmaker
2,393,717
Nina Hollander
RE/MAX Executive | Charlotte, NC - Charlotte, NC
Your Charlotte/Ballantyne/Waxhaw/Fort Mill Realtor

Nick & Trudy Vandekar ~ good morning, Nick and Trudy... I've had this issue come up a few times where a lien hadn't been fully cancelled and then the closing was delayed for days while an old bank was tracked down.

Dec 27, 2016 03:52 AM #24
Rainmaker
1,216,113
Bob "RealMan" Timm
Alliance Real Estate - Minot - Minot, ND
Bob Timm, Broker Associate, Alliance Real Estate

Great advice to pass on Nina Hollander . I just paid off my mortgage and I know I hit 3 out of 4 on your list but I'm not sure if I notified my insurer... I'll check on that today if he can get to his office, not sure if anyone in Minot ND will get out of their driveways today.

Dec 27, 2016 05:14 AM #25
Rainmaker
2,393,717
Nina Hollander
RE/MAX Executive | Charlotte, NC - Charlotte, NC
Your Charlotte/Ballantyne/Waxhaw/Fort Mill Realtor

Bob "RealMan" Timm ~ thanks, Bob... I suppose it's a good bet if you can't get out of your house, neither can your insurance broker. Congratulations on the payoff!

Dec 27, 2016 05:20 AM #26
Rainmaker
1,961,240
Brian England
Arizona Focus Realty - Gilbert, AZ
MBA, GRI, REALTOR® Real Estate in East Valley AZ

This is really great information that most people wouldn't remember to do after they paid off their mortgage!  I am sure it is an amazing feeling to know that you own your home free and clear!

Dec 27, 2016 05:40 AM #27
Rainmaker
2,393,717
Nina Hollander
RE/MAX Executive | Charlotte, NC - Charlotte, NC
Your Charlotte/Ballantyne/Waxhaw/Fort Mill Realtor

Brian England ~ hi Brian... not ever having stayed in a home long enough to fully pay off a mortgage, I don't personally know that feeling. But it must be a good one.

Dec 27, 2016 06:00 AM #28
Rainmaker
3,004,458
Sheila Anderson
Referral Group Incorporated - East Brunswick, NJ
The Real Estate Whisperer Who Listens 732-715-1133

Good morning again Nina. This excellent advice and most (I include myself in that) didn't do it all without prompting.

Dec 27, 2016 06:27 AM #29
Rainmaker
2,393,717
Nina Hollander
RE/MAX Executive | Charlotte, NC - Charlotte, NC
Your Charlotte/Ballantyne/Waxhaw/Fort Mill Realtor

Sheila Anderson ~ good morning, Sheila... it's amazing how logical all this is and yet most people don't think about it. Attorneys in our area are now offering an extra service at closing to home sellers for a relatively nominal fee to ensure the liens are cancelled once the payoff is sent in.

Dec 27, 2016 06:31 AM #30
Rainmaker
1,716,469
Patricia Feager
DFW FINE PROPERTIES - Southlake, TX
Selling Homes Changing Lives

Nina Hollander - This is excellent advice! The only thing I would add is to leave a paper trail for heirs so they have a historical account of what transpired on this property, including a separate file for maintenance and future Seller's Disclosure.

I hope this one gets featured! It could be very helpful to a lot of people.

Dec 27, 2016 08:57 AM #31
Rainmaker
2,393,717
Nina Hollander
RE/MAX Executive | Charlotte, NC - Charlotte, NC
Your Charlotte/Ballantyne/Waxhaw/Fort Mill Realtor

Patricia Feager ~ hi Patricia... thanks. I suppose I assumed that when anyone meets with their financial advisor and/or attorney, as recommended, that the paper trail would be established. Of course, maybe I should assume nothing! 

Dec 27, 2016 09:23 AM #32
Rainmaker
1,716,469
Patricia Feager
DFW FINE PROPERTIES - Southlake, TX
Selling Homes Changing Lives

Nina Hollander - I mentioned it just because my Attorney and Financial Planner failed to mention. I figured it out on my own because I am a perpetual worrier! When I told the lawyer he said, "I never thought about that." 

Dec 27, 2016 09:27 AM #33
Rainmaker
2,393,717
Nina Hollander
RE/MAX Executive | Charlotte, NC - Charlotte, NC
Your Charlotte/Ballantyne/Waxhaw/Fort Mill Realtor

Patricia Feager ~ and there you go, Patricia... making the point exactly, never to assume anything.

Dec 27, 2016 09:44 AM #34
Rainer
40,863
Juan Jimenez
A House on a Rock Home Inspections LLC - Richmond, VA
The Richmond Home Inspector

I'll be sure to check back in 28 years ;)

Jan 25, 2017 12:18 PM #35
Rainmaker
655,035
David Alan Baker Laveen & South Phoenix Realtor
HomeSmart - Laveen, AZ
Your local Expert

Well, I guess if you'd been a lender the suggestions would have been

1. to pull equity out - you earned it.

Jan 25, 2017 12:21 PM #36
Rainmaker
2,393,717
Nina Hollander
RE/MAX Executive | Charlotte, NC - Charlotte, NC
Your Charlotte/Ballantyne/Waxhaw/Fort Mill Realtor

Juan Jimenez ~ you're too funny... but I'm so old, I won't be around in 28 years to congratulate you! 

Jan 25, 2017 02:52 PM #37
Rainmaker
2,393,717
Nina Hollander
RE/MAX Executive | Charlotte, NC - Charlotte, NC
Your Charlotte/Ballantyne/Waxhaw/Fort Mill Realtor

David Baker Laveen Realtor & South Phoenix Realtor ~ I suppose the whole idea here is to get debt free and not convert that equity into another loan! 

Jan 25, 2017 02:53 PM #38
Rainmaker
636,936
Kasey & John Boles
Jon Gosche Real Estate, LLC - BoiseMeridianRealEstate.com - Boise, ID
Boise & Meridian, ID Ada/Canyon/Gem/Boise Counties

Very good advice Nina.

Jan 25, 2017 05:13 PM #39
Rainmaker
2,393,717
Nina Hollander
RE/MAX Executive | Charlotte, NC - Charlotte, NC
Your Charlotte/Ballantyne/Waxhaw/Fort Mill Realtor

Kasey & John Boles and the team at Jon Gosche Real Estate, LLC ~ thanks, Kasey and John. Very logical things to do, but people don't know or forget to do them.

Jan 26, 2017 03:36 AM #40
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