What paperwork to keep after mortgage is paid off?

When your mortgage is finally paid off, it's a significant financial milestone that comes with the important task of organizing and securing key documents to prove your home is truly yours, free and clear. The most crucial paperwork to retain includes your original mortgage or deed of trust, the promissory note, and the official release of lien or satisfaction of mortgage.

Essential Documents to Retain Permanently

After paying off your mortgage, certain documents are vital to keep for as long as you own the property, and potentially beyond. These documents serve as definitive proof that the debt has been satisfied and that you hold clear title to your home.

• Original Mortgage or Deed of Trust: This document originally established the lender's lien on your property. Even after payoff, keeping the original (or a certified copy) along with the official release of lien is crucial. This helps confirm the lender's interest in your property has been properly removed. You'll want to keep this document for at least as long as you own the property.
• Promissory Note: This is the legal document that outlines your promise to repay the loan and specifies the terms of the mortgage. It's proof of the debt itself. Like your mortgage or deed, this document should be kept for at least as long as you own the property.
• Deed of Reconveyance or Satisfaction of Mortgage: This is perhaps the most critical document you'll receive after payoff. It's the official notice from your lender, filed with your county recorder's office, confirming that the mortgage lien has been released from your property. This legally removes the lender's claim and proves you own the home outright. Ensure you receive the original or a certified copy of this recorded document.
• Property Deed (Grant Deed or Warranty Deed): This document proves you own the property. It's separate from your mortgage and establishes your legal ownership. You should always keep this document, regardless of your mortgage status.
• Title Insurance Policy: This policy protects you and your lender against any claims or disputes over the property's title. While its primary purpose is at the time of purchase, keeping it can be useful if any title issues arise in the future.

Important Records to Keep for an Extended Period

Beyond the core documents, other records are important for tax purposes, future sales, or general financial record-keeping.

• Full Payment History: Keep all statements, cancelled checks, or electronic transfer records that show your consistent mortgage payments leading up to the payoff. While the official satisfaction of mortgage is paramount, a complete payment history can back up your claim if any discrepancies arise.
• Property Tax Records: Keep records of all property tax payments. These are important for tax deductions and proving ownership responsibilities.
• Home Improvement Records: Detailed records of significant home improvements (receipts, contracts, permits) can be crucial. When you sell your home, these records can help you adjust your cost basis, potentially reducing capital gains taxes.
• Appraisal and Survey Documents: The initial appraisal and property survey from your home purchase can be useful for future reference, especially if you decide to sell or refinance.
• Escrow Account Statements: If you had an escrow account for taxes and insurance, keep the final statement showing a zero balance and the return of any surplus funds.

Why Keeping These Documents Matters

Properly retaining these documents offers several key benefits:

• Proof of Ownership: The deed and recorded lien release are definitive proof that you own the property free and clear.
• Future Transactions: When you eventually sell or refinance your home, these documents will be essential for the closing process. Buyers and lenders will require proof of clear title.
• Tax Purposes: Records of property taxes paid and home improvements can be vital for income tax calculations and potential deductions.
• Dispute Resolution: In the rare event of a dispute with the lender or a third party regarding your property's title, these documents provide undisputed evidence.

Recommended Document Retention Table

Here's a summary of key documents and their recommended retention periods:

Best Practices for Document Storage

• Secure Location: Store original vital documents in a safe, secure place like a fireproof safe, a safe deposit box, or a secure cloud storage service.
• Physical and Digital Copies: Keep physical copies of critical documents, but also scan and save digital versions in multiple secure locations (e.g., encrypted USB drive, cloud storage with strong security).
• Organize: Use a clear filing system to easily locate documents when needed.

What to Do Immediately After Payoff

1. Confirm Zero Balance: Contact your lender a few weeks after your final payment to confirm the loan balance is zero and that the account is closed.
2. Await Lien Release: The lender is legally obligated to provide you with a "Satisfaction of Mortgage" or "Deed of Reconveyance." This typically happens within 30-90 days, depending on your state.
3. Verify Recording: Once you receive the release document, verify that it has been properly recorded with your county's land records office. This public record confirms that the lien is officially removed.
4. Keep Originals: Store all original documents securely.

Mortgage Documentation