No more mortgage.

ScottM

ScottM

Taxi to Parking
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iBazinga!
I paid my mortgage off, which has made me very happy and totally debt free. But all I have gotten was a letter from the mortgage company telling me that I paid it off.

Aren't I supposed to get something like a title or deed to the house?

At least for my cars I have a nice title, my airplane I have the bill of sale and registration to prove ownership. I have nothing to show my house is mine.
 
congrats scott. i don't have a mortgage either. but i don't have a house either. but i'm debt free!
 
Viveca and I are debating whether or not to do this.

Are there any downside to paying off the mortgage?

I'm also interested what kind of paperwork you get. Perhaps it's worth a title search to make sure all liens have been removed.

Joe
 
Most lenders take a while to send you the cancelled mortgage. Make a note to contact them in 30 days.

ScottM said:
I paid my mortgage off, which has made me very happy and totally debt free. But all I have gotten was a letter from the mortgage company telling me that I paid it off.

Aren't I supposed to get something like a title or deed to the house?

At least for my cars I have a nice title, my airplane I have the bill of sale and registration to prove ownership. I have nothing to show my house is mine.
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You'll get release of lien in a few weeks. What will surprise you is who actually held your mortgage. When I refi'd it was some guy in Arizona.

You can get a copy of your deed at any time from the county clerk. What you'll check is the release of lien is recorded.

IANAL when we have plenty here.
 
ScottM said:
I paid my mortgage off, which has made me very happy and totally debt free. But all I have gotten was a letter from the mortgage company telling me that I paid it off.

Aren't I supposed to get something like a title or deed to the house?

At least for my cars I have a nice title, my airplane I have the bill of sale and registration to prove ownership. I have nothing to show my house is mine.
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Nope. Because at any time you could take out a HELOC or another mortgage. Basically it's just on record that there are no liens against it.
 
Depending upon your locality your court system -- probably at County level -- maintains the recordings of deeds. It takes a few weeks, generally, for the "trail" of sign-offs to reach that particular office. But you'll receive it. You'll need to have it when next you elect to sell the property and move to another piece of real estate.

HR

EDIT: "Register of Deeds" person is your contact if you have doubts.
 
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Areeda said:
Viveca and I are debating whether or not to do this.

Are there any downside to paying off the mortgage?

I'm also interested what kind of paperwork you get. Perhaps it's worth a title search to make sure all liens have been removed.

Joe
Click to expand...

The only down side is that you don't get between 25 and 39% back as a tax writeoff for your investment.

In other words, as far as I can tell, there is no downside.
 
Areeda said:
Are there any downside to paying off the mortgage?
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Well thanks to one 'downside' my accountant uttered it took me an extra year to convince my SO to do this.

The downside the accountant mentioned was that I would not be able to deduct interest from 1040 when I itemized.

To me that is not much of a downside. I say that because if I am not paying the interest in the first place that is more money for me to use. Getting back a small percentage of that interest in a tax deduction weighed against not paying the interest in the first place is a no brainier. But people are wired into thinking that the more you can deduct from taxes is a good thing and out weighs all other considerations. The delta on my taxes is far less than the paid interest for the year.

With the paying off of my mortgage I get my tax and insurance escrows back too. That is more money that I can have working for me instead of sitting in a mortgage account working for them.

I cannot really think of a downside.
 
Congratulations!! that's a major accomplishment. It will take a while for the followup documents to arrive. As already listed, it may be in a different form, all I rec'd was a "release of lien" form.

Gary
 
mikea said:
You'll get release of lien in a few weeks. .
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It has been a month since I did the pay off and I had not heard anything. That is why I was asking the PoA mafia what they thought and knew. I think the most important thing is I do have the letter from Wells Fargo telling me I am free and clear. If I had to prove something about paying it off I could.
 
Gary said:
The only one I can think of is that you will now seriously consider a new shiny <insert favorite airplane>! :cornut:

Gary
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Not actually thinking about that. I have been thinking of selling my airplane. With all the stuff I have going on I just have not been flying it at much as I would like. I love my plane too much to let it become a hanger queen. It is a really nice, decked out Warrior (See image of the panel). But I cannot sell it for nearly what I paid for it and the money I put into it. So I will keep it for the time being and fly it when I can. If someone makes me a good offer for it, then I will sell it. BTW folks a good offer is >=$55,000 US. Don't bother me with anything less.
 

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ScottM said:
... Getting back a small percentage of that interest in a tax deduction weighed against not paying the interest in the first place is a no brainier. But people are wired into thinking that the more you can deduct from taxes is a good thing and out weighs all other considerations.
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Well, it's a numbers game. If taxes weren't an issue, then it would be a no brainer that if you took money earning x% interest and used it to pay down a loan you were paying (x+y)% interest on, that you'd have a y% win.

But when the tax treatment for the earnings differs from the tax treatment for the interest, then you do have to look more closely at the numbers. Whether it's a win or a loss depends on your tax bracket and the "spread" between the two interest rates.
The delta on my taxes is far less than the paid interest for the year...
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You'd want to add in the earnings you could get investing the money to the savings on your taxes, and then compare that sum to the amount you paid in interest.
-harry
 
Congrats!! :thumbsup:

As for downside, the inaccurate conventional wisdom revolves around what you stated, deduction on taxes. However this is a falicy.

Sending the bank $1,000 a month so you can deduct $280 in taxes (assuming 28% tax bracket), just makes no sense. If it does make sense to anyone here, send me $1,000 a month and I'll send you back $280. :D
 
ScottM said:
I paid my mortgage off, which has made me very happy and totally debt free. But all I have gotten was a letter from the mortgage company telling me that I paid it off.

Aren't I supposed to get something like a title or deed to the house?

At least for my cars I have a nice title, my airplane I have the bill of sale and registration to prove ownership. I have nothing to show my house is mine.
Click to expand...

You should get a "release" or similar document indicating the mortgage is paid or otherwise discharged, and releasing the security lien on the property. It will need to be recorded in the land records of your county.

The lender will usually send the release straight to the land records for recording, but you'd be smart to follow up on it.

It's also not immediate - there might be a few months gap.
 
Gary said:
Congratulations!! that's a major accomplishment. It will take a while for the followup documents to arrive. As already listed, it may be in a different form, all I rec'd was a "release of lien" form.

Gary
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It's usually just a one-page deal. It might only be a few sentences and a signature.

It will say something like, "the mortgage, dated XXXXXX, recorded among the land records of Cook County, Illinois, at Book #YYY, Folio #ZZZZ, encumbering property at 123 Fake Street, is hereby acknowledged as released in full."

And I'll emphasize again: you'd be smart to check your land records (probably through the county clerk) to make sure the release has been recorded. Do it in about 6 months.

If it's not recorded, title to your property will continue to be "clouded" - someone who looks at your title will see that there's an unreleased mortgage.
 
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Obi Heed Kenobi said:
It's usually just a one-page deal. It might only be a few sentences and a signature.

It will say something like, "the mortgage, dated XXXXXX, recorded among the land records of Cook County, Illinois, at Book #YYY, Folio #ZZZZ, encumbering property at 123 Fake Street, is hereby acknowledged as released in full."

And I'll emphasize again: you'd be smart to check your land records (probably through the county clerk) to make sure the release has been recorded. Do it in about 6 months.

If it's not recorded, title to your property will continue to be "clouded" - someone who looks at your title will see that there's an unreleased mortgage.
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Thanks, good advice.
 
kevin47881 said:
Sending the bank $1,000 a month so you can deduct $280 in taxes (assuming 28% tax bracket), just makes no sense. If it does make sense to anyone here, send me $1,000 a month and I'll send you back $280. :D
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I'll offer $290! :tongue:
 
Congrats. I hope someday I can say the same about being debt free.
 
Greg Bockelman said:
The only down side is that you don't get between 25 and 39% back as a tax writeoff for your investment.

In other words, as far as I can tell, there is no downside.
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And as Dave Ramsey says, paying out $10,000 to pay $3000 less tax doesn't quite make sense.
 
ScottM said:
It has been a month since I did the pay off and I had not heard anything. That is why I was asking the PoA mafia what they thought and knew. I think the most important thing is I do have the letter from Wells Fargo telling me I am free and clear. If I had to prove something about paying it off I could.
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Yeah. It could be more like a few months than a few weeks.
 
Congrats, Scott. Had I not moved every few years, I'd easily be in the same place.

Trapper John said:
Because of the truly bizarre way credit scores work, yours will probably go down because you owe less...

Congrats, btw.
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And that it will. My mortgage is currently with a private individual. It's not reported. My credit score (which is excellent anyway) notes: "Your score could be higher if you took out loans and paid them back on time. Using credit, and using it responsibly will increase your score."

The perverse part of that is in many states the insurance companies have convinced insurance regulators to allow the use of credit scores in setting your insurance rate. Pay off mortgage, have no car loans, score decreases a bit and your insurance rates will go up. BTDT
 
Congrats!

I'm with you on the mortgage interest deduction...if you're in a 25% bracket, then you're spending $1.00 to get $0.25 back. Not a great ROI.
 
Obi Heed Kenobi said:
It's usually just a one-page deal. It might only be a few sentences and a signature.

It will say something like, "the mortgage, dated XXXXXX, recorded among the land records of Cook County, Illinois, at Book #YYY, Folio #ZZZZ, encumbering property at 123 Fake Street, is hereby acknowledged as released in full."

And I'll emphasize again: you'd be smart to check your land records (probably through the county clerk) to make sure the release has been recorded. Do it in about 6 months.

If it's not recorded, title to your property will continue to be "clouded" - someone who looks at your title will see that there's an unreleased mortgage.
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Yep! That's what it said. My legal beagle did provide a copy of the deed with the release recorded.

Gary
 
JeffDG said:
I'm with you on the mortgage interest deduction...if you're in a 25% bracket, then you're spending $1.00 to get $0.25 back. Not a great ROI.
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To be fair, that's only part of the ROI, we keep ignoring most of the ROI in this equation:
Again, it all boils down to the spread between the interest rates, what you're paying vs what you can earn if you invest that money instead of using it to pay down your mortgage, and your tax bracket.

Also, you have to make sure you pick the right percentage to represent your tax bracket, because it's not the overall percentage of your income that you pay in taxes, each dollar of deduction comes off that percentage written there in the table, because it counteracts your "last dollar earned", which is taxed more heavily than your "first dollar earned".
-harry
 
Gary said:
Yep! That's what it said. My legal beagle did provide a copy of the deed with the release recorded.

Gary
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It's important to know - you don't want to put your property on the market, have a buyer lined up, and then have the title search find that your mortgage was never released. It can take months to get a release from the lender, and your sale will likely fall through - your buyer's lender won't approve the loan while there's another loan attached to the property because: 1) no title insurer will insure the property against a known cloud; and 2) the older lien takes priority over the newer lien (I can explain lien priority if necessary)!

FYI, it's usually pretty easy to do a basic title search on your property - you just go down to the land records, and look up your name in the grantor/grantee indexes (this can be done through the internet in many places, actually).

What's kind of worrisome about it is that I can look up a lot of information about you. If I had a grudge against you, for instance, I could look up your name in the land records and find out where you lived (if you owned property in your own name) - which is why a lot of people own property through corporations, trusts, or other "third party entities."
 
Obi Heed Kenobi said:
FYI, it's usually pretty easy to do a basic title search on your property - you just go down to the land records, and look up your name in the grantor/grantee indexes (this can be done through the internet in many places, actually).

What's kind of worrisome about it is that I can look up a lot of information about you. If I had a grudge against you, for instance, I could look up your name in the land records and find out where you lived (if you owned property in your own name) - which is why a lot of people own property through corporations, trusts, or other "third party entities."
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Uh..OH... I'll try to stay on your good side from now on! :cheerswine:

Your point is well taken, there is a lot of personal info floating around out there that most people don't even know exists!

Gary
 
In re credit scores:
We own two houses, both paid off for over 2 years. No other short term debt. Two credit cards averaging $2000/mo, both paid off each month. I bought a 2 year old car (paid cash) in March and the people doing the paperwork said they had never seen that high a credit score before.

Apparently, the old wives tales about no debt yielding low credit scores is just an old wives tale.
 
The Old Man said:
In re credit scores:
We own two houses, both paid off for over 2 years. No other short term debt. Two credit cards averaging $2000/mo, both paid off each month. I bought a 2 year old car (paid cash) in March and the people doing the paperwork said they had never seen that high a credit score before.

Apparently, the old wives tales about no debt yielding low credit scores is just an old wives tale.
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Well, you don't exactly have NO debt. You just pay it off every month. For those that do not use credit at ALL, I think their credit score would eventually go to zero.
 
Scott what David said was generally accurate but there can be a few twists and the process is not uniform in all states. Keep the paper that you have in a secure place you may need it. Since you referenced mortgage I'll assume its a mortage and not a Deed of Trust which they do in some states.

Following is what happens in PA as I said it may vary from state to state:

The procedure is for the Lender or the assignee of the lender (as you know mortages are transferred and sold several times over) to Send you a Satisfaction Piece. It is a release of the lein but its more than that it also indicates that the not only is the lender releaseing the lein but the mortage has also been satisfied. That document is filed in the Recorder of Deeds office or the office where land records are maintained in your jurisdiction here it is our county Recorder of Deeds. In PA the lender has 30 days from the final payment to file this document ( they often don't and we usually wait 60 days before we start to make noise)

Here it would be very unusual for the lender to send you your deed. When you purchase a property The three main documents Deed, Note ( IOU) and Mortage ( Mortage is really a security interest in your property that you give to the lender to assure that the Note is paid off so techincally you are really paying off the note not the mortgage but thats splitting hairs) so anyhow The Title company or who ever acts as closing agent takes the note and sends it to the lender they then record the Mortage and Deed and when they come back from the recorder's office ( they don't keep the orginal) the the Mortage is sent to the lender and the Deed is sent to the home owner. Here the deed is never sent to the lender because they have the Mortgage. Often times the closing agent won't send the Deed back to the home owner after recording because they just get too backed up and forget. No worries you can call them and remind they they never sent it to you after recording or if its lost get a certified copie of your deed from the recorders office. Once the Satisfaction Piece or Release of Leins is Recorded the Recorder sends it back to the home owner if they don't you can ask the recorder to send it to you or again get a certified copy. In PA it is rare for the lender to send the satisfaction piece to the home owner they usually record it directly. Other states may vary. If you have any questions speak to an Illinois Real Estate Attorney.

And congrats on the payoff. I recall my grand parents and folk having a mortage buring party when they paid off. Apparently it was something that was done when folks were a bit more fiscally responsible and didn't have 50 year mortages
 
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