What Happens When You Pay Off Your Mortgage


First Things First...when you finally pay off your mortgage - send the kids to Grandma and Grandpa's place and get weird.


Next...get out the wine!  

It's time to CELEBRATE!!

Being Mortgage Free is a feeling only matched only by your first kiss or winning the lottery.  

Enjoy it!

But what about after the party?  What should you expect?  

Well, you may receive a call or a statement declaring your mortgage is paid in full...it's typically a form letter with a bunch of information on your last stretch of interest and principal payments, with a little information on what to do next...oh, and a whole lot of MARKETING for new ways for you to go in to debt using your house as collateral.

DON'T DO THAT!!  Seriously...you just freed up a pile of cashflow - use that money wisely.  We'll get to that in a moment though.

What exactly has to be done though when the time comes?

Well, let's start with cleaning up that Land Title.  

Of course nothing is that easy....but hey, you've been paying month in and month out...you can hang in there just a little longer.  

Unfortunately - just because your mortgage is paid off doesn't mean you don't have expenses that come up.  May I introduce you to the Mortgage Discharge Fee.

WTF is a Mortgage Discharge Fee?!


Ugggggh.  Believe it or not, it's a fee you have to pay to REMOVE your mortgage lender from your Title.  In Saskatchewan, that's a $350.00 slap give or take a few.

But let's face it - it's totally worth it.

And if you want everyone to know you are mortgage free...do like they do in Scotland and paint your Front Door Red!  

Next you should update your Home Insurance

...trust me, you want to make this call.  When you have a mortgage, and home insurance, if there is a flood, fire, or act of god - your insurance carrier will payout to the first "loss payable" on your home insurance.  This is typically your Mortgage Company!  Just imagine the red tape if your mortgage is paid off and you have to use your home insurance...it shouldn't be that big of a deal, but it could be.

Besides, don't you want to have that satisfaction of making that call:

Insurance Agent: "Thank you for calling ABC Insurance.  How can I help you today?"

You: ..."I would like to update my Insurance...I just finished paying off my MORTGAGE!"

Insurance Agent:  "Hell Yeah!  Let's do this!"

Ahhhhhhhhhhhhhhhh.  So Nice.

Okay, let's keep on trucking.  What now?

Let's talk about Property Taxes.

Has your lender been paying your Property Taxes?  If so, probably a good idea to contact your local municipality to get that all sorted out.  Hey, the mortgage may be paid for, but the cost of living in your neighbourhood isn't.  You still gotta pay for the privilege to live there!

...and now - the FUN STUFF!

Take a breath.  Close your eyes.  You now have $$$ at your disposal - wow...what a great feeling.

So what should you do with it?  Take a trip?  Buy a new Audi?  Go to the casino and put it all on Black?

Whoa there cowboy/cowgirl...just slow down on the dreaming, just for a minute.

Consider - you've been dumping cash in to this sill mortgage for years and years and years...and while celebrating is good - don't let it effect your ability to make good decisions.

If you're like me, you probably have kids that need to go to University...oh, right - kids.  They are the leaches we love - but they are gonna be syphoning off of the Bank of Mom and Dad for a while yet.  Better put those mortgage payments somewhere accessible because one day, those kids are coming with their hands out and their laundry in the car.

What if you don't have kids, or the ones you do have are gone?  

Well, consider your retirement at that point.  You were probably smart enough to have Life/Disability Insurance while you were paying your mortgage...and that's wise!  But don't go cancelling that insurance - let it ride.  But now, take those mortgage payments you've been making and put those in to an investment pool for retirement...here's a bit of information that will make you want to vomit...but the average Canadian needs to have something like $756,000.00 in savings in order to have a "comfortable retirement"...cue the Sad Trombone;

That's a lot of cake!

Well, those mortgage payment you've been making, coupled with compounding interest in a low risk investment market wil be a hell of a start to get you there!

And finally....It's time to have a little fun.

Hey - You Deserve It!

I suggest you take your first 3 - 6 months of being mortgage free...and using those funds for something awesome.  Take that 2 week trip to Montego Bay, go on a New Wardrobe Shopping Spree, or buy that old hobby car you've always wanted to restore.  

Live free.  Laugh often.  You did it....you paid off your mortgage.

Good for you.  

Keep on being awesome.



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