You’ve paid off your mortgage – congrats! You likely have a newfound sense of pride in your home now that it’s truly yours. So what’s next? There are several steps you’ll need to take before you wave all thoughts surrounding your mortgage goodbye.

Step 1: Confirm Your Mortgage Release

Once you’ve paid your loan in full, you’ll receive mortgage release documents that need your review. These documents confirm that your loan obligation has been satisfied and that the lender’s lien will be removed from your property.

Specific documents to look out for include a declaration that the mortgage has been paid off completely as well as your promissory note for the loan amount marked as canceled. You’ll want to look for a certificate of satisfaction or similar legal document that has been filed with your local records office. This certificate releases the deed on your home to you and shows that you are now owner of the home. We recommend following up with your local records office to confirm that the lien is officially removed, that way you don’t run into any trouble later.

Step 2: Take Control of Insurance and Taxes

If you previously had an escrow account, your lender likely handled your property taxes and homeowners’ insurance. Once you pay off your mortgage, that responsibility shifts entirely to you.

What to be aware of:

  • Your escrow account will now close. You will receive any funds that you have left.
  • You’re now responsible for paying homeowners insurance. Your mortgage lender requires you to carry home insurance, as they need it to protect themselves. Once you pay off your mortgage, it’s now in your hands. While you don’t need to carry insurance, we highly recommend you do so to protect your home and financial security.
  • You’re now responsible for property taxes. You should also alert any local authorities that issue property taxes that they now need to bill you instead of going through your mortgage lender.
  • You’re responsible for Homeowners association (HOA) fees. Let your HOA know to collect fees directly from you now that you paid off your mortgage.

Step 3: Put Your Extra Cash to Work

Now that you have extra money in the bank every month, you have a lot more flexibility in your budget. Now you can focus on strengthening other aspects of your finances.

Here are a few ideas:

  • Boost your retirement savings
  • Pay down other debts (like student loans or credit cards)
  • Grow your emergency fund
  • Invest for long-term goals
  • Save for experiences—or even your next property

Step 4: Monitor Your Credit

Make sure to check your credit report a few months after your mortgage is finalized to ensure everything is reported accurately. You’ll want to look for a zero balance and that your account shows up as paid in full. It’s unlikely that your credit score will change much after paying off your mortgage. Your payment history has been factored into your score over the course of your mortgage.

Step 5: Plan for Ongoing Homeownership Costs

Paying off your mortgage is not the end of your house-related bills. You’ll still have to pay property taxes and pay homeowners insurance to ensure your home is covered in the event of a disaster. A dedicated fund for repairs can help prevent financial stress later on should something unexpected pop up.

While it may seem like a laundry list of more things you don’t want to do, taking care of these things while they’re fresh will save you headaches should you have to figure these things out later. Whether you choose to truly make this your forever home or you can see another home purchase in the future, this milestone opens the door to new possibilities. Take a moment to celebrate this accomplishment and make the most of your new mortgage-free lifestyle – you’ve earned it!