The dream of all homeowners is to be able to pay their mortgage and live in a free and clean house. Many homeowners don’t even think about paying off their home loans and think it’s almost impossible for someone to own a home without a mortgage. However, there are people who have goals and work hard to achieve that goal of paying their mortgage. Homeowners who manage the arduous task of paying their mortgage deserve bragging rights and it is an impressive goal and achievement. The very few and proud homeowners who pay off their home loans should make sure that, after making the final payment on their home mortgage, the mortgage lender has released the lien on the title to the property, so that In the event that they need to sell their property at any given time, there will be no red tape. All FHA loan programs require security deposits for property taxes and homeowner’s insurance, so once the mortgage loan has been paid off, the security deposit requirements for property taxes and insurance will be the sole responsibility of the owner.
Things to know about your mortgage payment before the final payment
As you near the final payoff line on your mortgage, there are several things you should know about paying off your mortgage before your final mortgage payment is due. One of the things you should do is request a final settlement figure from your mortgage lender 45-60 days before your last and final mortgage payment. Homeowners need to understand that mortgage borrowers pay their mortgage loan payments late, and because they are paying late, homeowners may actually owe more on their mortgage balance than they think they do. For example, if a homeowner has a mortgage payment due this month and pays his or her payment now for this month, this month’s payment covers the prior month’s principal and interest payment. The clock of interest is always ticking, day or night. Interest is added every minute of every day. If you’re one of those homeowners who’s been paying house payments in excess of the monthly minimum due, you’ll be surprised to find out that you owe substantially less than you thought you did.
How do you pay your mortgage?
Homeowners with mortgages have a mortgage loan servicer who manages their mortgage loan. The loan servicer’s responsibility and scope of work is to ensure that the borrower’s accounting records, including security deposits, are accurate and that monthly statements are submitted on time and record that payments made by borrowers are registered correctly. When a homeowner requests a payoff on a mortgage loan, the mortgage loan servicer is the agent who processes the payoff statement to the homeowner or mortgage lender requesting payoff on the borrower’s behalf. Upon a payment request by the borrower, the loan servicer must prepare the correct payment figures and ensure that the payment letter is sent to the borrower or to the borrower’s power of attorney within seven days of the payment request. . The loan servicer will indicate the date the loan payment will be due, and if that date passes, additional daily mortgage interest will accrue. There are fees and costs in paying a mortgage. In addition to the final payment of principal and interest, borrowers will be required to pay recording fees to the county recorder’s office to release the mortgage lien on the title to the property. The mortgage lender may also have additional fees and costs, such as processing fees, wire transfer fees, unpaid fees, as well as late payment fees, if applicable.
Release of security deposits when you pay your mortgage
There are other tasks required by the mortgage loan servicer when you pay off your mortgage. Most borrowers will have an escrow account with their loan servicer. When you pay off your mortgage, the escrow account must also be closed. One of the mortgage servicer’s jobs is to escrow property taxes and homeowner’s insurance and pay them when due. Since the servicer will no longer service your mortgage loan, they must close your escrow account and refund any remaining funds in your escrow account to you within 20 days after your loan is paid off and must reset and close your escrow account. Be sure to get confirmation of your escrow account closing and check with your homeowners insurance company and county property tax division to make sure they have the correct address to send future insurance bills to. and property tax bills. due. Get the proper due dates so you won’t be late and you won’t be charged a late fee or risk your home being uninsured. Automatic online payment settings are a good way to make sure your bills are paid on time, but make sure you have enough funds in your bank accounts.
When do you get clear and clear title to your home?
Many homeowners think that just because the servicer shows you a statement with a zero balance on your mortgage, that you own your home freely and clearly. This is not the case. You will only have free and clear title to your home when the application for release is filed by the county recorder’s office. This can take anywhere from a few days to several weeks. You are officially the owner of your home free and clear when you physically obtain a copy of the release showing the date registered as well as the identification document number from the county recorder’s office. There are several ways to gain possession of this release. You can have it mailed to you or you may have the option to pick it up at the county recorder’s office.
When you contact your homeowner’s insurance company to let them know you’ve paid your mortgage, be sure to tell the insurance company that the servicer is no longer the additional insured and ask them to remove your name from the homeowner’s insurance policy. homeowner’s insurance. Your homeowner’s insurance company may request a copy of the filed application for release, as well as a copy of your deed.