ABA Family Legal Guide

Home Ownership

The Financial Side of Home Ownership

Understanding Your Mortgage

Should I pay off my mortgage?

If you have enough money, should you pay your mortgage down sooner than scheduled or even pay off the loan completely? That depends on your circumstances. It's usually considered a good idea to make extra payments on your principal when you can, because that can reduce the term of the loan by several years and save you a bundle in interest.

Don't pay your mortgage off if it'll leave you strapped for cash. You may need a cushion later. But if you can manage it without sacrificing other things you need, paying off your mortgage can be an excellent investment.

When you make the final payment, get a Certificate of Satisfaction of Mortgage (sometimes called a Deed of Reconveyance or a Release of Deed). This document states that the loan has been paid in full. Have it signed by the lender, acknowledged (notarized), and entered in the public records.

This document is especially important if you've been paying a previous owner rather than a bank. In that case, ask your lawyer to draw up the certificate, then send it with a return envelope. If the previous owner balks, ask your lawyer to apply more pressure because it's extremely important to have that document filed.

If the bank offers to file the document for you, wait a few months and then check with the county register of deeds to make sure it's been done. Florida and some other states have laws requiring that the satisfaction of mortgage be filed sixty days after demand. If the lender was holding the abstract for your property, you should get it back now. And if you were paying into an escrow account for tax and insurance bills, ask to see what's left in your account and get a refund.