Paid mortgage: Now what do I do?

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seashell
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Paid mortgage: Now what do I do?

Post by seashell » Fri Jan 12, 2018 5:59 am

I paid off my 15 year mortgage on my townhouse.

Now that I've paid my mortgage are there things I need to be aware of or do? I'm vaguely aware that I need to pay my property taxes directly (though I'm fuzzy on the details on what exactly I need to do)

What things do I need to take care of, change, or do now that my mortgage is paid? Any suggestions, advice, or words of wisdom appreciated

Thanks!

grettman
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Re: Paid mortgage: Now what do I do?

Post by grettman » Fri Jan 12, 2018 6:25 am

Your tax bill should come directly to you now. If not, contact your county tax office. Set up an automatic allotment whereby a portion of your paycheck goes straight to a savings account on a systematic basis so you have the money saved to pay this bill. Do the same of insurance. Need to make sure insurance bill goes to you too. Invest and save like a madman. Don’t increase life style. Give more.

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peterinjapan
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Re: Paid mortgage: Now what do I do?

Post by peterinjapan » Fri Jan 12, 2018 9:05 am

Read through all the sample portfolios on the Bogleheads site. Basically start building net worth, starting with tax advantaged (esp. anything with a match) first, then taxable accounts. You are young so it might be okay to be 100% equities, based on broad indexes.

NextMil
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Re: Paid mortgage: Now what do I do?

Post by NextMil » Fri Jan 12, 2018 9:21 am

Nothing substantive to add, just want to say nice work and that I am definitely jealous.

mortfree
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Re: Paid mortgage: Now what do I do?

Post by mortfree » Fri Jan 12, 2018 9:26 am

let your insurance company know that there is no longer a mortgage on the property so they remove that from the policy.

In a few months, follow up with your county to ensure the mortgage satisfaction has been recorded.

Grt2bOutdoors
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Re: Paid mortgage: Now what do I do?

Post by Grt2bOutdoors » Fri Jan 12, 2018 9:27 am

seashell wrote:
Fri Jan 12, 2018 5:59 am
I paid off my 15 year mortgage on my townhouse.

Now that I've paid my mortgage are there things I need to be aware of or do? I'm vaguely aware that I need to pay my property taxes directly (though I'm fuzzy on the details on what exactly I need to do)

What things do I need to take care of, change, or do now that my mortgage is paid? Any suggestions, advice, or words of wisdom appreciated

Thanks!
1. Call tax assessors office - inform them that you want the tax bills sent directly to you.
2. You will get a form from the mortgage company informing you that your mortgage has been paid in full. Subsequently, you'll receive a form from them with their release of lien against your property and that it has been recorded in the county clerk's records. Make a copy of that, keep the original in a location that is secure, like a safe deposit box. Don't misplace it or lose it, ever.
3. Call you home insurance company, inform them that the mortgage has been paid off and you want to remove the mortgage company from the insurance policy. In the event of an insurance claim in the future, having the mortgage company on their will cause a delay in you receiving claim proceeds.
4. If you don't have sufficient liability insurance, consider an umbrella policy.
5. Buy yourself a dinner and a bottle of champagne - celebrate.
6. Take your monthly mortgage payment and invest it in low cost diversified index funds.
7. Relax........... :sharebeer
"One should invest based on their need, ability and willingness to take risk - Larry Swedroe" Asking Portfolio Questions

ColoradoRob
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Re: Paid mortgage: Now what do I do?

Post by ColoradoRob » Fri Jan 12, 2018 9:41 am

Well done! In addition to taking the lead for paying your property taxes (as opposed to your mortgage company paying it out of escrow) you could ask for the lien-release document from the mortgage holder to be sent to you. It should be a document that shows that your loan is paid in full. Don't burn that piece of paper as some people do. That is proof that you own the property and don't owe anyone for it. Pair it with your original purchase paperwork (HUD-1 statement) and keep it someplace safe for when you go to sell. Check with your local tax assessor and ensure that the property is titled in your name. One more thing to do is to contact your home insurance company and have them change the loss-payee from the mortgage holder to you so that if something happens and you have to make a claim, they will give the money to you and not your mortgage company. Something else to consider depending on your situation, is placing the home into a trust. You can shrink your emergency fund, if you had one. Now that your mortgage is paid, the emergency fund only needs to be enough to take care of the occasional home repair.

Jack FFR1846
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Re: Paid mortgage: Now what do I do?

Post by Jack FFR1846 » Fri Jan 12, 2018 10:32 am

When I paid off my mortgage, I had already been paying the town directly for property tax and the insurance company directly for insurance so my only action was to marvel in all that money building up in my accounts.

Proper marveling can be done without paid for subscriptions or in person classes. Youtube videos of cats would be sufficient.
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AJS
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Re: Paid mortgage: Now what do I do?

Post by AJS » Fri Jan 12, 2018 12:11 pm

When I paid off my mortgage, I increased my contributions to my retirement plan (403b) by the same amount I was paying for the mortgage. If you can do this, you will have one great retirement.
The sea was angry that day my friends...

seashell
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Re: Paid mortgage: Now what do I do?

Post by seashell » Fri Jan 12, 2018 5:10 pm

Thanks for all your great replies!

I really appreciate it. If anyone has anything else to add, please let me know.

I'm sharing a virtual celebration/party/drink with all of you! Cheers!

seashell
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Re: Paid mortgage: Now what do I do?

Post by seashell » Fri Jan 12, 2018 5:12 pm

NextMil wrote:
Fri Jan 12, 2018 9:21 am
Nothing substantive to add, just want to say nice work and that I am definitely jealous.
You'll get there! I'm cheering you on! I can't quite believe I got here myself. It feels a little surreal.

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grabiner
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Re: Paid mortgage: Now what do I do?

Post by grabiner » Fri Jan 12, 2018 11:01 pm

AJS wrote:
Fri Jan 12, 2018 12:11 pm
When I paid off my mortgage, I increased my contributions to my retirement plan (403b) by the same amount I was paying for the mortgage. If you can do this, you will have one great retirement.
Similarly, you can decrease your emergency fund. If you keep six months' living expenses for emergencies, your need has been reduced by six months' principal and interest that you no longer pay. (Taxes and insurance formerly paid by escrow are still part of your living expenses.)
Wiki David Grabiner

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Watty
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Re: Paid mortgage: Now what do I do?

Post by Watty » Fri Jan 12, 2018 11:22 pm

A few more things,

Call your home insurance company and have them take the mortgage company off of the insurance policy. You may be able to increase your deductible higher than the lender would allow so you will need to decide if that is a good choice or not.

In a few months after there had been time for all the paperwork has cleared be sure check with your county to make sure that the mortgage lien has been taken off the property. In some areas you may be able to do that on line. Do this even if you get the paperwork saying that the lien has been removed. Once in a great while there can be an error and getting it fixed now will be a lot easier than years from now. There was a post a while back by someone that was settling their parents estate and trying to sell the house. It still had a mortgage lien on it from a loan that had been paid off decades before. The original lender had gone through multiple mergers and could basically not be found now.

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Cycle
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Re: Paid mortgage: Now what do I do?

Post by Cycle » Fri Jan 12, 2018 11:40 pm

Watch your net worth grow as you hammer on the savings. Contribute 5500 to Roth or backdoor Roth at the start of 2018.

seashell
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Re: Paid mortgage: Now what do I do?

Post by seashell » Sat Jan 13, 2018 4:58 am

Thank you for your great replies! Much appreciated!

Silverado
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Re: Paid mortgage: Now what do I do?

Post by Silverado » Sat Jan 13, 2018 7:37 am

Cycle wrote:
Fri Jan 12, 2018 11:40 pm
Watch your net worth grow as you hammer on the savings. Contribute 5500 to Roth or backdoor Roth at the start of 2018.
We are just about a year into being mortgage free and I marvel at how the plot of the taxable Vanguard account looks that we opened with the "mortgage payment". We are lucky enough to be able basically cash flow insurance and property tax (not really, but we funneled the take home increase after 401k max reached to the bucket that was then used to pay those bills. Our company match stays even when the max is reached early in the year.) Seeing how much money was being sent to the bank in a different way was interesting. Purely psychological I know. The key is not to look at the account we pulled the final $75k out of....

It did take a long time for the bank to process the paperwork and get the lien release to us. So long that I called to make sure I hadn't forgotten something.

Congrats!

TRC
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Re: Paid mortgage: Now what do I do?

Post by TRC » Sat Jan 13, 2018 8:08 am

I would get a no closing cost Home Equity Line of Credit (HELOC) so that in the event of an emergency, you can tap the money if you ever need it. Do this while you're employed. If you ever became disabled, it would be a lot more difficult to get to get this.

stan1
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Re: Paid mortgage: Now what do I do?

Post by stan1 » Sat Jan 13, 2018 9:13 am

Congratulations! Now what do you do with the income each month you were putting into paying off the mortgage? Well of course save it in retirement and then taxable investing accounts but I'd also add consider knocking a few items off your deferred enjoyment list. By that if you've told yourself "someday I'd love to go to Funland for a few weeks or I'd love to spend more time on my Kittles hobby but I can't afford it right now" -- go ahead and do it now within reason of course. Some people see this as rewarding yourself for an accomplishment and I can see that view but that's not how I think of it. To me it's an acknowledgement that I'm pretty fortunate to have the opportunity to use my money to do the things I enjoy. You can't take it with you.

LateStarter1975
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Re: Paid mortgage: Now what do I do?

Post by LateStarter1975 » Sat Jan 13, 2018 9:26 am

Great job. As someone who's also trying to pay off my 15-year mortgage 10 years early (3 more years to go), I'm very excited for you. Imagine what you can do with the extra money.....
Debt is dangerous...simple is beautiful

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Cycle
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Re: Paid mortgage: Now what do I do?

Post by Cycle » Sat Jan 13, 2018 1:24 pm

Silverado wrote:
Sat Jan 13, 2018 7:37 am
Purely psychological I know. The key is not to look at the account we pulled the final $75k out of....
When we paid off our mortgage 6 months ago, the more profitable thing would have been to invest that money in the market. I actually was sort of market timing, I figured the market can't go any higher so I might as well take the opportunity to achieve our goal of being mortgage free and pay off the last 75k of principal.

That market-timing gamble cost us ~8k this year; however, it was worth it in my mind as we will have more purchasing power in the event of a downturn, we can keep less cash in our emergency fund, and the standard deduction at tax time is an even better deal since we couldn't itemize that interest. If I were just looking at the numbers though, I should have kept the mortgage.

deikel
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Re: Paid mortgage: Now what do I do?

Post by deikel » Sat Jan 13, 2018 2:03 pm

NextMil wrote:
Fri Jan 12, 2018 9:21 am
Nothing substantive to add, just want to say nice work and that I am definitely jealous.
+1
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seashell
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Re: Paid mortgage: Now what do I do?

Post by seashell » Mon Jan 15, 2018 9:04 am

You're all awesome! Thanks for your valuable input.

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