What Happens When You Pay Off Your Mortgage?
Author: Mike Whitehead
Former Content Editor
Reviewed by: Graham Turner
Income and FTB Specialist
Paying off your mortgage can bring a sense of pride and achievement. The main implication is pretty huge: you own your home!
Assuming no other mortgage lenders or parties have a stake in it, you will have paid off your mortgage and be ready to take the final steps in establishing ownership of your property.
What do these final steps entail?
Now that you no longer have monthly mortgage payments to make, you will receive some paperwork to complete. Your mortgage lender will write to you with a copy of your title deeds and a closing statement letter to confirm that you have repaid your mortgage in full.
You may also have to pay an ‘account fee’ if you had any deferrals in your mortgage term, and there may also be an ‘exit fee’ so your mortgage lender can take care of any necessary admin work.
If you haven’t received any documentation from the mortgage lender, be sure to contact them and request confirmation that your mortgage has been paid in full and that any charges on your property have been removed.
Another thing to be aware of is any third parties linked to your mortgage, such as home insurance. Be sure to inform them you have paid off your mortgage and no longer owe the mortgage lender any money.
Moreover, check that you have cancelled your direct debit to ensure you’re no longer sending money to the mortgage lender. Finally, check your credit history to make sure there are no outstanding fees on your mortgage balance, as this can affect your ability to get a mortgage or another form of credit in the future.
Your options now
You’ve freed up a big chunk of your income with the paperwork out of the way.
You have so many options now, and you may be wondering what the best path to take is.
Well, let’s take a look at a few of them below:
If property investment interests you, consider establishing a buy-to-let portfolio. As property value increases, you can generate capital growth with your money, and you’ll earn extra income. Increased demand for property means there will always be tenants who will pay rent.
Got a student loan that needs paying off? Maybe it’s a credit card debt you’ve been putting off. Why not start paying them off now and lower the amount of interest you pay over time?
Mike Whitehead
Former Content Editor
Following a successful career in the financial services industry, working for one of the world’s largest Bank’s both in the U.K and internationally, Michael became a freelance writer and editor in 2012.
In addition to being a published author, he has contributed numerous articles and long-form essays for both national and regional publications across a wide variety of topics, mainly; financial services, technology, sport, travel, politics, business, economics and social media.
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