Making your final loan payment: the five-step process

Making your final loan payment: the five-step process

Paying off your mortgage is a big deal, and there’s more to it than just sending us your final payment. This article outlines the five-step process of making your final loan payment.

Step 1: Request a payoff quote

Your principal balance (as listed on your mortgage statement) is not the total amount you’ll need to come up with to pay off your mortgage. That’s because you also owe interest charges right up until the day you pay off your loan.

There may be other charges you haven’t paid yet, such as deferments, taxes, or homeowners insurance premiums. Depending on where you live, you may have to pay a lien-release fee. And if you plan to pay off your mortgage before the end of your term, you may be required to pay a prepayment penalty. So expect your payoff amount to be higher than just your principal balance.

For those reasons, you need to request a payoff quote from us before you can make your final payment.

Your quote will show the exact amount you need to pay to be released from your mortgage loan. Your payoff quote may also include fees for final documents.

To request a quote, sign in to your online account and click your loan number to go to your dashboard. Click on Payments and then click on Request Payoff. Depending on local and state laws, we may charge you a fee of up to $30 to prepare your payoff quote, which we’ll let you know in advance.

To request your quote by phone, call our Customer Service team at 800-365-7107.

Your quote will have an expiration (or “good-through”) date—so act quickly once you receive it. If the quote expires before you make your final payment, you’ll have to start all over and get a new one—which you may have to pay for again. Because of factors such as interest, credits, fees, or other charges, your loan balance can change daily. To confirm that you’re sending us the right payoff amount, call 866-317-2347 24 hours before submitting your payment.

Step 2: Make your payment

After you receive your payoff quote, it’s time to make your final payment. You can pay with a certified check or through a wire transfer from your bank. Be sure to make your payment before your quote expires—or we’ll have to create another one and possibly charge you another fee.

If you pay by check, be sure it’s a bank-certified check—not a check from your checkbook. Don’t forget to write your loan number on the check. When you mail it, include a brief letter explaining that you’re paying off your loan in full. Mail your check about 10 days in advance of your payoff expiration date, so it arrives in our mailbox before your quote expires. Send your payment to: 

Shellpoint Mortgage Servicing

55 Beattie Place, Suite 110

Greenville, SC 29601

If you pay by wire transfer, reference your payoff quote to find out what information you need to include with your payment.

We’ll send you an email and a letter to confirm that we’ve received your payment.

Important reminder: If you’ve been paying your mortgage by autodraft, be sure to cancel any payments that are scheduled after you request your payoff quote. After your payoff, we’ll automatically cancel all future withdrawals. If you’ve been paying your mortgage using an automated bill-pay system, be sure to stop all payments to us after we confirm that we’ve received your payoff.

Step 3: Arrange to make your own tax and insurance payments

You may have made your last payment, but the payoff process may not end there. If you‘ve paid off your mortgage and you’re staying in your house, there are a few more things you’ll need to take care of.  

In most cases, your mortgage payment includes more than just your principal and interest. If you have an escrow account, we use those funds to pay your property taxes and your homeowner’s insurance premiums. When you pay off your loan, we’ll automatically cancel your escrow account. If there’s any money left in your escrow account after your final payment, we’ll send you a check or deposit that amount into your bank account. Just be sure to tell us which option you prefer.

If you stay in your house after you’ve paid off your mortgage, it will be your responsibility to pay your property taxes and homeowner’s insurance premiums. We advise you to start setting money aside on a regular basis so you’ll be able to pay those bills when they come due.

You’ll also need to inform your local tax authority and your insurance providers that you’ve paid off your loan:

  • Tax authority—Contact your local tax office and have them send all future tax documents to you.
  • Homeowner’s insurance provider—Contact your insurance company and tell them you’ve paid off your mortgage. If you continue your coverage, they’ll need to remove us from your account.
  • Other insurance providers—If you have other kinds of insurance on your property (such as flood or earthquake) be sure to have those companies remove us from your policies as well.

Step 4: Manage your mortgage documents and your credit report

You’re almost done! Getting the deed to your property and making sure your loan payoff is properly recorded are the last tasks in the payoff process.

When you pay off your loan, we’ll make sure your lender signs a lien release/certificate of satisfaction. This document verifies your payoff and releases the original property deed to you—but you won’t get the deed immediately.

On your lender’s behalf, we’ll send the lien release to your local county recorder or land records office within 30 business days after your payoff date. After your county records the document and returns it to us, we’ll send you the finalized document. This process can take up to 90 days.   

We’ll also notify the credit reporting agencies (Experian, Equifax, TransUnion, and Innovis) that you’ve paid off your mortgage loan. After that, your credit report should show that you no longer have a mortgage payment. If that information doesn’t show up on your report within 90 days, you may have to file a dispute with the credit bureaus or with the Consumer Financial Protection Bureau (CFPB).

Make sure you keep all of your mortgage documents in a safe place and/or store them digitally. You may need them for tax purposes or other legal reasons.

If you sell a property, you should keep the documents at least three years after the sale. Some of the documents you should hold onto are:

  • Closing documents, including:
    • Copy of the deed
    • Promissory note
    • Title insurance policy
    • Home inspection report
    • Closing disclosure
  • Payoff quote
  • Lien release/certificate of satisfaction
  • Original deed of trust (which we send to you after you pay off your loan)
  • Letter from us stating you’ve paid your mortgage in full and your account is closed.

Step 5: Celebrate!

You did it! Paying off your mortgage is a big accomplishment—one that typically takes decades. So take some time to celebrate.

Start planning now how you want to re-allocate the money that you were formerly spending on mortgage payments. You could put it toward savings, investments, paying off other debts, or home improvement.  

The bottom line

You’ve accomplished a big financial goal, and now it’s time to start working on the next one. So look at your debts, expenses, and current budget. Factor your extra funds into your budget and make a plan to use that money wisely. If you need help with financial planning, read this informative article.

If you’re living in a home that’s free from payments, take a moment to enjoy the freedom of not having a mortgage payment. As finance expert Rob Berger once said, “The best thing money can buy is financial freedom.”