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It's finally time, at the end of this month I'm going to call my mortgage holder and request a payoff quote and pay off the house. I know that my property tax and my insurance are bundled as part of my mortgage, so I assume I'll need to contact my insurance company and the local tax office to better understand how to start managing those payments myself. I also think there may still be specials going on for public utilities that were built, which I'll also need to contact the county tax office about.

Beyond those three things, is there anything else I need to do? I presume that I'll get an actual physical deed that I'll want to toss in a safety deposit box or similar.

For context, I'm in the United States; Wichita KS to be specific. I'm also paying off the loan many MANY years early (I guess inflation is good for something?), so if that adds additional context I'd love to know.

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  • Congratulations on your hard work. It is an amazing thing to own your home free and clear.
    – Pete B.
    Commented May 10 at 12:10

2 Answers 2

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Yes you will certainly need to set up payments for your insurance and taxes. Depending on the insurer, you may need to pay every six months instead of monthly, but you can easily "save away" money every month and just pay every six months, or whenever your insurer allows payments.

In my location, taxes are due at the end of the year, but again some jurisdictions may require or allow more frequent payments. In any case, you can also save away money each month and pay at different times.

I do this now even with a mortgage - it's called "self-escrowing" and is apparently becoming more popular, since 20 years ago I had to convince the bank to let me do it, and now it's almost a given. It helps you see exactly how much you're paying for insurance (which you can shop around for) and taxes (which you can't) instead of the amount being "buried" in your monthly payment.

As far as what documents to keep, you do want to keep the "lien release" or whatever document you get from your lender stating that the mortgage is paid off. That will be required when you (or your heirs) go to sell the property. Other than that, ownership documents are more of a local matter, so I would call the county assessor (or a similar county government office) and see what documents you need and what they keep. They would also have ownership records, but you may want to keep copies yourself in the event of a dispute.

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    Talk to your insurance broker about payment options; I pay annually. My town wants tax payments quarterly.
    – keshlam
    Commented May 6 at 17:51
  • @keshlam good examples - I shouldn't assume that my local experience is "typical". I've made the answer more general.
    – D Stanley
    Commented May 6 at 18:00
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    Lien releases should be recorded with the jurisdiction (city/county/state) where the lien was recorded. The lien release copy sent to the owner should be kept, but it’s much more important to follow up and check that it gets recorded. If the release isn’t filed and the owner goes to sell some time later, the seller’s copy of the release is not going to make closing go smoothly all by itself.
    – nobody
    Commented May 6 at 20:55
  • In Florida, property tax payments are due before April. However, one can get a 4% discount if they are paid in November. A benefit of self escrow. My property insurance is bundled with my car insurance and I pay monthly for no additional fee.
    – Pete B.
    Commented May 10 at 12:09
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Mostly ditto D Stanley. Just a few other random thoughts ...

When I paid off my mortgage, I was expecting to get a document from the county saying my title was now clear of liens. I never got any such paper. I called them and they said there was no such thing.

I filed away the paper from the bank saying the mortgage was paid off. I never used it for anything or showed it to anyone, but I kept it just in case.

Yes, if you were paying taxes and insurance through an escrow account, you will need to contact the tax office and make arrangements to pay taxes directly, and similarly with your insurance company. In my case, at one point I refinanced the mortgage and the bank said they were not interested in setting up an escrow account, so I had to make those arrangements then.

In my area, property taxes are due twice a year. One advantage to having an escrow account with your mortgage is that you pay taxes and insurance in convenient monthly payments. When you're off the escrow, you'll have to save up to pay semi-annually or annually. My taxes were small enough that I basically just came up with the money when they were due, but if you live in a higher-tax area or the value of your house is higher compared to your income, that may be impractical. You might really need to carefully budget and save for it.

My homeowners insurance company gave me the option of paying annually, semi-annually, or monthly. But there was a significant discount for paying annually or semi-annually. The first year I was also paying car insurance for 4 cars (mine, my wife's, and two kids'), and I got all those policies at the same time, so I just didn't have the cash to pay all that all at once. I talked to the insurance agent about renewing one or more of those policies on a different date to spread things out, but that never happened. What did happen was that the kids grew up and moved away and my wife divorced me, so I ended up with just the homeowners and one car, that I could afford to pay semi-annually. But whatever.

I didn't have anything else I had to worry about. I presume you're already paying your utilities separately. If there are any special tax assessments, they're either rolled into your escrow or you're already paying them separately. Basically, though, anything you were paying through the escrow you will now have to make arrangements to pay directly.

Congratulations on paying off your mortgage! May I suggest that you might take the first month or two that you are mortgage free to buy yourself some things you couldn't afford before, but then you should put most or all of this money into savings or retirement. As I paid off my debts, I started putting the amount I used to pay on debts into my retirement fund, and I was able to retire earlier than I had originally planned.

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