Paying off your mortgage is a huge milestone. Whether it happened after 30 years of steady payments or through an accelerated payoff plan, being mortgage-free is worth celebrating. But once that last payment clears, there are still a few important financial housekeeping tasks that can easily slip through the cracks.
1. Create Your Own Escrow for Taxes and Insurance
When you had a mortgage, your monthly payment probably included escrow, an amount set aside for property taxes and homeowner’s insurance. The lender handled those payments on your behalf.
Now that you’re mortgage-free, those expenses still exist, but you’re the one in charge of paying them.
To stay on top of it:
- Set up your own savings account to act as your “escrow.”
- Deposit a monthly amount equal to 1/12 of your annual tax and insurance bills.
- Schedule reminders for due dates or reach out to your insurance company and local tax authority to confirm them.
You might even earn a little interest on those savings while you wait to pay. It’s a small move that keeps you prepared and in control.
2. Cancel Your Mortgage Autopay
Autopay makes things easy, but don’t forget to turn it off!
Traci shares a story about a friend who left automatic payments running after paying off his mortgage. The lender kept receiving payments and, though he eventually got a refund, it took months.
If you had automatic payments set up through your bank, log in and cancel them now. That final payment may have cleared, but your bank doesn’t know unless you tell it. Avoid unnecessary withdrawals and extra hassle by taking a minute to confirm.
3. Watch for Your Paid-In-Full Paperwork
Your lender should send you the official documents proving your loan is fully paid. The most important one? The Promissory Note, stamped “Paid in Full.”
This is your legal record that the loan no longer exists. Don’t toss it!
Keep this document somewhere secure, such as:
- A fireproof home safe
- Your estate planning binder
- With your homeowner’s insurance policy
It may never be needed, but if a question ever arises about your mortgage status, this paperwork is your proof.
4. Confirm Your Title Is Clear
Even after you pay off your mortgage, it can take time for your local government’s property records to reflect that.
About 4-6 months after your final payment, search your county property records (many are online) to confirm the mortgage lien has been released.
If the lien is still showing up, don’t panic. Just contact the county recorder’s office or the mortgage company and ask for next steps. It’s an easy fix, but one that’s worth tracking to make sure your title is fully clear.
Being mortgage-free can be a huge relief, and you’ll enjoy it even more knowing the details are handled.
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