After you pay off your mortgage, you are entitled to the deed to the property. There are a few steps that need to be taken. First, the mortgage company will send you the original promissory note and deed of trust, which is also called the mortgage in some states. Then you will contact the county land office to have the mortgage released. The land office will send you the deed release. For peace of mind, you should pay a title searcher to verify that there are no other liens against the property, and you should keep all documentation.
Promissory Note and Deed of Trust
When you closed on your home, you signed a document promising to pay off a specified amount of money within a specified amount of time. This document is called a promissory note. You also signed a deed of trust or mortgage -- a statement that contains the terms of the loan. The mortgage company recorded it at the county land office. After you make the last payment, you will receive the original promissory note back marked "paid and cancelled." The mortgage company will also send back the original deed of trust or mortgage.
The deed of trust or mortgage was filed at the county land office at the time you closed on the loan. After the loan is paid, the burden of having the mortgage legally released is on you. You need to contact the county land office and file for a release. Legally, the mortgage is not paid until the release is recorded at the land office. The land office will send you a copy of the release.
When you bought the house, you paid for a title search. A title search confirms that you own the property free and clear -- that there are no claims or liens against it. For peace of mind, you may pay to have an updated title search conducted. The title examiner will look at a survey of the property and check property taxes, bankruptcy and sales history information for the past 20 years. This generally costs about £130 to £195.
Many times, homeowners do not understand how important it is to have the deed of trust or mortgage released and to retain a copy for their records. Some are so happy to have the burden removed that they destroy it. For tax purposes, you should keep all settlement and release-of-deed documents. They contain information for capital gains calculations and expenses such as property taxes and insurance. They are also helpful if you sell the property one day.