The lender may also send you the canceled trust deed, which secured your loan with title to your house and which conveys the home to a lender if the borrower defaults. You also need to check your credit report to make sure your mortgage account now shows a zero balance. It may take a few weeks to receive your paperwork, which should include a Satisfaction of Mortgage statement—a document stating that you’ve paid off your home. If you received nothing after a couple of weeks of making your last payment, call your lender to check on your paperwork and make sure it will soon be on its way.
Likewise, for your homeowner’s insurance, contact your insurance company or insurance carrier to have the lender removed from the policy. The lender will no longer have any claim to your house, so they should not have the legal right to any insurance payout in the case of fire and other damage. If your house suffered significant damage and your lender’s name remains in the homeowner’s policy, it can make filing and collecting of an insurance claim more complicated because you’d have to deal with the lender first before you could even get your insurance check.
Now that you’re taking over those payments, you must set aside enough cash to pay for both. Experts highly recommend homeowners to create their own escrow account or open a bank account where they can deposit the funds needed to cover those each month. The good news is that your lender is likely to have kept extra funds above and beyond what you actually owed in taxes (when your payments were held in escrow). You should get that reserved collection a couple of weeks after making your final payment in the form of a check from your lender. You can put that into your account and you can also deposit the same amount as your mortgage each month until you have enough to cover your property taxes and homeowner’s insurance premium.
You now have some serious cash you can spend whenever you want. But on the wiser side, it’s important to not feel overwhelmed by all these extra cash and miss the opportunities to achieve other concrete goals you are looking forward to, such as a car, a vacation home, and other big purchases. You can also keep part of that money in your bank account or in your retirement fund. If perhaps there are renovations you’ve been dying to do in your home, you can now achieve them and boost its resale value. Or you can make modifications to help you age in place and enjoy the latter years of your life in your beloved home.
