Congratulations! Making that final mortgage payment is a huge achievement. But before you celebrate too hard, there’s one more important document you need: a Deed of Reconveyance. Don’t worry – we’ll explain everything you need to know in simple terms.
When you take out a mortgage to purchase a home, the lender places a lien on the property’s title. This gives them the right to foreclose if you default on the loan. Once you’ve made the final payment, the lender must remove this lien by issuing a deed of reconveyance. This deed transfers ownership of the home fully back to you.
The Purpose of a Deed of Reconveyance
A deed of reconveyance, also called a satisfaction of mortgage, serves an important purpose. It proves you’ve paid off the mortgage and no longer owe the lender anything related to the property. Some key facts about reconveyance deeds:
- Legally transfers property ownership from the lender back to you
- Removes the lien or claim the lender had on the home
- Provides proof you hold a clear title without any outstanding debts
- Allows you to sell the property free of complications
- Required by law in most states within 30-60 days of final payment
You need this deed even if you don’t plan to sell. It prevents the lender from making any further claims on the property.
When in the Mortgage Process it is Issued
There are several steps involved in getting a satisfaction of mortgage created and recorded:
- You make the final mortgage payment.
- Contact the lender to request the reconveyance deed if needed.
- The lender or a title company prepares, signs, and notarizes the document.
- The executed deed is sent to you within the state’s required timeframe.
- Review the deed carefully for any errors.
- Record the deed with the county clerk’s office to make it legally binding.
When you close on the house, the buyer will pay off the mortgage if you sell it before it’s due. The title company will then handle getting the reconveyance deed.
What Information the Deed Contains
A typical deed of reconveyance includes
- Homeowner’s name and address
- Lender or trustee’s name
- Property’s legal description and parcel number
- Statement that the mortgage is satisfied
- Signatures of involved parties and notary stamp
It proves you hold the title free and clear without any outstanding claims
Why a Recorded Deed is Vital
It’s critical to record the reconveyance deed properly for several reasons:
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Provides evidence the title is clear when selling the property. Most buyers will not purchase without proof the title is free of any liens.
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Prevents the lender from unlawfully attempting to foreclose. The recorded deed proves you owe nothing more.
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Allows you to obtain title insurance. This protects against claims made against the title in the future.
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Limits legal headaches if the lender misplaces mortgage records or fails to record the deed.
Even years later, you can still record the deed if needed. The payoff itself removed the lien, while the deed is just documentation.
Steps to Take if You Don’t Receive the Deed
Don’t worry if you paid off your mortgage but never got a reconveyance deed. But do take action to get the issue resolved:
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Contact your lender and any title company or closing attorney involved. Alert them no deed was provided.
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Review your closing documents for information. The deed may have been signed but not recorded properly.
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Research state laws on deed of reconveyance recording requirements. This can give you leverage with the lender.
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Consult a real estate attorney. They can help compel the lender to issue a deed if needed.
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Get paperwork confirming the payoff, such as bank statements or the final mortgage account statement. These support your case.
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Be persistent and keep meticulous records. Lenders face penalties for not complying with deed laws.
Options for a Lost Deed of Reconveyance
If you locate a misplaced or lost deed, you can still record it with the county clerk. But if it cannot be found, you may need to pursue a quiet title action. This involves filing a lawsuit to establish you hold full legal title to the property. While not ideal, it is an option if the lender cannot provide a new deed.
Paying Off the Mortgage is Just the Beginning
Receiving a deed of reconveyance is an important milestone when you pay off your home. But remember it’s not the end of all financial obligations:
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You must still pay property taxes and home insurance. Failing to do so can result in foreclosure.
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Maintaining the property is your responsibility. No lender will cover roof repairs or other maintenance needs.
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Refinancing is still possible. This replaces your paid-off mortgage with a new one.
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Home equity loans allow you to leverage the property’s value for other goals.
Even though it’s nice to finally pay off your mortgage, real financial freedom doesn’t start when you own your home free and clear.
How DSLD Mortgage Can Help
Even after your loan is paid off, DSLD Mortgage can help:
- Answer questions about your Deed of Reconveyance
- Guide you through the process
- Help resolve any issues
- Provide referrals to other services you might need
Removing the Lien from Your Property
When you pay off your mortgage, the lender is required to release the lien on your property. This is typically done by recording a Deed of Reconveyance with the county recorder’s office. Once the lien is removed, your property is no longer encumbered by the mortgage, granting you full ownership rights.
To ensure the lien is properly removed from your property title, follow these steps:
- Check Recording: Check to see if the Deed of Reconveyance has been filed with the county recorder’s office.
- Do a Title Search: Do a title search to make sure the lien is gone and the title to your home is clear.
- Review the Title: You should check your property’s title often to make sure it doesn’t have any liens or other claims on it.
If you follow these steps, you can avoid problems or issues in the future and enjoy the peace of mind that comes with owning your own home.
What happens when you make your last mortgage payment?
FAQ
Should I receive a deed after paying off my mortgage?
Warranty Deed: This is the document that proves you own the property. When you pay off your mortgage, the lender should release their lien on the property, and you should receive a deed without the lender’s name on it.
What happens to the title when you pay off your mortgage?
A deed of reconveyance is a document that proves you’ve paid off the mortgage on your home. It represents the transfer of the title to your property from your mortgage lender to you. Over the time you repaid your mortgage, you legally owned the property, but the lender held the mortgage lien — or claim — to it.
How do I get my property deed after paying off my mortgage?
If you need a copy of your property deed, we advise you to contact the county your mortgage is recorded in or check their website for instructions on how to request one.
Do you get any paperwork when you pay off your mortgage?
Get paperwork from your servicer. When you pay off your mortgage, your lender or loan servicer will probably send you paperwork confirming that you’ve made your last payment on the loan and officially ending your mortgage obligation.