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Message
What to do when mortgage is paid in full
Posted on 5/6/18 at 9:49 am
Posted on 5/6/18 at 9:49 am
Could someone explain what needs to be considered before and right after your last mortgage payment is made? Some things I am interested in knowing is what I should do concerning the title, insurance and taxes which were paid through escrow, is a letter from mortgage company saying loan is paid in full a good idea, and anything else I may be forgetting. I am very excited about getting my house paid off in my mid 30s but want to make sure I get everything done correctly.
14
Posted on 5/6/18 at 9:54 am to feverish
Pop some champagne?
Posted on 5/6/18 at 10:02 am to feverish
Start paying my house note?
Posted on 5/6/18 at 10:06 am to feverish
Well they should mail you the title. No letter needed in that case. You’ll need to continue to put money aside to pay your yearly taxes. You’ll write a check when you get your tax bill.
Posted on 5/6/18 at 10:31 am to Teauxler
Bring your documentation to the clerk of court to cancel the mortgage documents.
Posted on 5/6/18 at 10:32 am to Teauxler
Isn't there something that should be done with the clerk of court to show there are no liens remaining and title is free and clear?
Posted on 5/6/18 at 10:41 am to feverish
The mortgage company will send you documents that it is paid in full. Take that to the clerk of court to file. There's a small fee for it. The mortgage company will send you a check of what's left in the escrow account. Remember when your homeowners and flood insurances are due. You will be responsible for paying them on your own. If there home is in Louisiana, property taxes are due at the end of the year unless you live in Orleans Parish (which are due in the beginning of the year).
Congrats and go celebrate!!!
Congrats and go celebrate!!!
Posted on 5/6/18 at 11:26 am to feverish
quote:
I am very excited about getting my house paid off in my mid 30s
I don't even know you and I'm happy for you.
Posted on 5/6/18 at 1:16 pm to feverish
Time for a boat note, a pool, a coupla new cars, private school, your wife to quit her job, and of course, a bigger house with a new mortgage. Congrats baw
Posted on 5/6/18 at 1:21 pm to feverish
Vacation home...for the write off
Posted on 5/6/18 at 1:30 pm to Costanza
quote:
Time for a boat note, a pool, a coupla new cars, private school, your wife to quit her job, and of course, a bigger house with a new mortgage. Congrats baw
Thanks but I am going to pass on most of that, lol. Only monthly debt after this will be my wal mart credit card so I can get 2% savings on Murphy USA gas per gallon. Next I plan to save up for first rental paying cash, continue fully funding Roth for me and my wife and invest in START program for kids college.
This post was edited on 5/6/18 at 1:31 pm
Posted on 5/6/18 at 4:36 pm to feverish
Call the mortgage company, they will have the steps you need to take.
Unless your interest rate is really high I wouldn't be that excited. Mine is 30 years at 3.25% and I itemize, so my after-tax rate is closer to 2.5%. That is so close to inflation that paying it off early is wasted, I very much look forward to stretching it out the full 30 years. YMMV though.
quote:
I am very excited about getting my house paid off
Unless your interest rate is really high I wouldn't be that excited. Mine is 30 years at 3.25% and I itemize, so my after-tax rate is closer to 2.5%. That is so close to inflation that paying it off early is wasted, I very much look forward to stretching it out the full 30 years. YMMV though.
Posted on 5/6/18 at 4:39 pm to feverish
quote:
wal mart credit card so I can get 2% savings on Murphy USA
Just sign up for the free shell card, its not a credit card and you save 5% instantly.
Posted on 5/6/18 at 4:54 pm to jimbeam
quote:
Vacation home...for the write off
Never have figured out how people save money by giving a dollar in interest to a mortgage company to avoid paying 25 cents in taxes.
Posted on 5/6/18 at 5:05 pm to kengel2
Kengel how comparable is price of shells gas to Murphy per gallon without discount. I am always looking for a better deal, thanks.
Posted on 5/6/18 at 5:09 pm to foshizzle
quote:
Unless your interest rate is really high I wouldn't be that excited. Mine is 30 years at 3.25% and I itemize, so my after-tax rate is closer to 2.5%. That is so close to inflation that paying it off early is wasted, I very much look forward to stretching it out the full 30 years. YMMV though.
I am over 4% and I wasn't itemizing before the new tax law so definitely wont now. I'm just looking forward to opening my cash flow up more and also not having to owe money to a bank where my wife, kids, and I call home.
Posted on 5/6/18 at 5:30 pm to feverish
Just divide by 12 and make sure to save that much. That's how I did it.
Posted on 5/6/18 at 6:02 pm to EA6B
quote:
Never have figured out how people save money by giving a dollar in interest to a mortgage company to avoid paying 25 cents in taxes.
If you can get your rate at or near inflation, you're golden. I'll give a non-realistic example to make it obvious:
Let's suppose you borrow for 30 years at 0% interest. Congratulations, because you are making money. No, you aren't just paying no interest, you are making extra cash. Why? Because instead of paying off the loan you can invest it in something else that is safe and pays you. Pocket the difference.
You should never rush to pay off a loan that costs less than the long-term rate of inflation. In fact you should want to borrow as much as possible. Here's another example:
Suppose you get a 30 year mortgage at 4% and for some reason inflation skyrockets to, say, 20%. You should be willing to brutally torture puppies and kittens if it will help you pay as little as possible each month because dollars lose value so quickly but your house (probably) does not. Think of it as like owning metals as an inflation hedge, but it's actually real estate.
Where do taxes come in? Because if you itemize deductions then your mortgage interest is tax-free. This has the effect of lowering the cost of your mortgage.
Posted on 5/6/18 at 7:53 pm to jimbeam
quote:
Vacation home...for the write off
Jokes on you,,,there is no longer a second home mortgage interest deduction. See your accountant for more info.
This post was edited on 5/6/18 at 10:00 pm
Posted on 5/6/18 at 8:01 pm to GCTigahs
I seem to remember that the mortgage company sends the clerk the paid in full notice....
But I would keep the paperwork to make sure.
But I would keep the paperwork to make sure.
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