What happens when you pay off a house?

Escrow ends when your mortgage ends. You will be responsible for paying the annual insurance and property tax bills directly to the insurance company and to the tax authority. So yes, you stop paying the loan....but you will need to save sufficient funds each month to pay your annual property taxes and insurance (homeowners, flood, etc)

We paid off our home about this time a year ago. We are now the escrow for property taxes and insurance. I guess you could drop your insurance given you own the property outright but would be unwise...worked too hard for that asset...??.

Our property taxes and insurance began to rival the monthly P&I.

We received paperwork noting we had satisfied the terms of the loan as well as the escrow balance, which we turned around and paid property taxes and insurance

When you pay off a "mortgage" it means you have completed payment of a promissory note. Therefore, the mortgage is satisfied and the lien against your house is lifted. Escrow exists so that the lender doesn't lose its collateral value due to a non-market event (insurance) or lien position (delinquent property taxes trump a mortgage lien).

After paying off the note or "mortgage" it's up to you if you want to protect your investment with insurance. If you don't pay your property taxes the city / county will come after you and place a lien on your property.

Props to you for paying off a mortgage without having a clue of what escrow is or how it works.

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So, in reality, the only thing you stop paying is Principle and Interest? The escrow payments remain and retain the same amount?

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No, you stop paying everything, the Lender is not going to keep an escrow going for you, they no longer have skin in the game, they don't give a shite

When your homeowners insurance comes due , the insurance company sends you a bill, pay it if you want, cancel it if you want

When property tax comes due they send you a notice, I advise you to pay this one

But it is all on you, if you want to set up an account and put so much in it every month so you have the money available when you need it, go ahead, but you will have to set that up, and if you want call it your personal escrow

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Props to you for paying off a mortgage without having a clue of what escrow is or how it works.

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Hardly. I am years away, but just wondering what happens. I was looking at my amortization today and got to wounding.

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The lender forces you to pay your insurance and taxes into escrow to protect their loan. Once you don't have a loan with them, they don't care if you insure or pay the taxes on your house.

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This, and they aren't going to deal with the hassle of paying your insurance/tax bill if they aren't making any money off you.

You live happily ever after?

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I still would pay insurance and taxes (escrow).

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Yes. Not to an escrow account, though. You pay the insurance company (if you want insurance, that is - your call now, not the bank's) - and taxes (not optional).

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Are you really just saving the principle and interest after paying it off?

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Yes. That's the loan part you just paid off.

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Does escrow change after this happens?

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If you own the house outright, you don't have to have insurance. I wouldn't recommend that, but it is your choice.

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What happens when you pay off a house

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Not sure about you, but I'm throwing a party. Started with a 30 year loan, refinanced to 15 years, now paying extra to pay off sooner... The party is coming.

Like others have said, you are still on the hook for taxes and insurance (is you so choose).

Note: I opted out of escrow with my last refi. Didn't like the idea of the bank managing my money and I wanted flexibility to shop insurance without input from the bank.

We didn't escrow either. Like paying
My stuff myself.