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Can You Pay Off Mortgage Online?

The day has finally come to place the final payment to your bank and pay off your mortgage. But even if this sounds simple, the procedure is nothing but simple. There will be paperwork to finish, but can this all be done online?

Even thorough most lenders will allow you to make monthly mortgage payments online, this is not the case with the final payment. You can not pay off your mortgage online. You can only do it via wire transfer or check.

Suburbia house

Overall the pay-off procedure can be confusing. But if you follow these steps, this whole process will be without hiccups.

You Are Close to a Final Mortgage Payment – What to Do Next?

When applying for a mortgage, the day the whole debt is paid off seems so far away, but there are ways you can pay off your mortgage faster, and now that day is approaching. If you don’t want to end up paying additional costs, you need to start the pay-off procedure on time. Here is when you need to go through this procedure:

How to Start the Pay Off Procedure?

Paying off your mortgage is not complicated as a mortgage application, and it doesn’t last that long either. However, there are steps you need to take – it’s not like you can only go online and make the final payment. According to some of the best mortgage books, the first step you need to take is to contact your mortgage broker or loan officer and ask them to send you a payoff statement or payoff letter. This letter will have the exact amount of money you need to pay as your final payment as well as the date when this money must be deposited. The letter will also have instructions on how to make a payment (this is usually done via bank wire transfer). The letter will state the final interest rate you need to pay, and if you miss the deadline, you will have to ask for another statement. This is especially important with adjustable rate mortgages since here rates can quickly change.

If you are selling a home or refinancing your mortgage loan, this letter will be asked from your lender by a third-party company such as a tile company.

Other Documents You Need to Receive

So, aside from the pay-off letter, you need to ask your loan officer to provide you with other documents so you can finish the whole procedure. Here are the documents you must have:

  • A canceled promissory note – This is a note you give to your lender as a promise you will pay off your debt. Once the mortgage is paid off, you should get this note back.
  • Certificate of Satisfaction – Your loan officer should inform your local office of the record that you have paid off your debt. You will have to pay between 25$ and 50$, depending on the state you live in, to the record office in order to get this paper. This paper is crucial for your records that you have paid off the mortgage.
  • Deed of trust – As you know, a deed of trustallows your lender to take your home in case of a foreclosure, But once you pay off your loan, the lender should inform the government office of record and send them the deed of trust. The lender can also send this document to you.
  • Final mortgage payment – This is free and important proof that you have paid off your mortgage and that you don’t own principal, interest, or fees.

Step-By-Step Guide on How to Pay Off Your Mortgage

So now that you know what documentation you should have once everything is paid off, let’s sum up the whole procedure once again. Here is a step-by-step guide on how to pay off your mortgage.

Step 1Request a pay off quote or letter from a loan officer
Step 2Follow the payment instructions on the letter and make payments via bank transfer
Step 3Receive all the following documentation once the payment is made
Step 5Make sure everything is recorded at the local record office – if it is not, bring the proof yourself that everything is paid

What to Do When Everything Is Done?

If you are selling the house or refinance, once you make the payment, your mortgage broker or real estate agent will take the next necessary steps. However, if you have paid off the mortgage, there are other steps you need to follow. For example, if you have a recurring mortgage payment at Wells Fargo, you need to cancel all the automatic payments. The next thing you need to do if you have an escrow account that is paying your insurance is to contact your insurance company and let them know you are now an owner of the house, so the company can remove your loan officer from the policy. The same rule is if you have life insurance for a mortgage.

Also, if you still have an escrow account while paying off the mortgage, you should receive any remaining funds from the escrow account automatically. If this doesn’t happen, contact your loan officer. You should also contact your tax collector and inform them that from now on, your tax will no longer be paid through an escrow account.

 Pile of documents

Can You Do Some Steps Online? 

To be fair, some of the steps we listed above can be done online. For example, you can ask for a loan payoff letter online, and you can also inform many institutions online as well. However, some of the steps can only be done in person. And even if this seems like a complicated procedure, once you start it, it will be done in no time. Just make sure once you pay off your mortgage, you keep the documents that prove that safely.