So You Have Paid Off Your Mortgage: What Next?

There is no greater satisfaction than sending the last cheque of your mortgage or home loan. However, your duties as a homeowner do not end with the loan. As a homeowner, you have to take care of multiple financial details like insurance, property tax, renovations and maintenance etc. While it is a huge relief to be able to spend money on matters other than the mortgage, a little bit of planning can go a long way. If you are wondering what’s next, start by figuring out how much extra money you have after the mortgage is settled and what you can do with it. Here are the top ways you can reinvest or channel additional funds for your home.

Finalise the paperwork

It is nearly as important to get official confirmation on the loan repayment as it is to pay it back. You should always have proof of your payments, and ensure that your lender issues a statement that says you have completed the loan terms. It is ideal to wait a couple of weeks before you contact your lender about the final paperwork and give them time for processing.

Additionally, you should also ensure that you have completed all necessary paperwork to handover ownership as well as other property deeds.

If you are paying off the loan before the term, ensure that you follow all rules and avoid any pre-payment charges. Ask your lender about the details of paying early and how you can go about sending your last payment ahead of schedule. After the final cheque has been processed, cancel any automated deduction plans you may have opted for with your bank.

Continued insurance and tax payment

Depending on the size of your property, you may have to opt for different types of property tax and insurance. Once your mortgage is paid off, the onus of paying these necessary fees lies entirely on you. Ensure that you find an easy and convenient way to pay your taxes regularly and on time. Contact the taxing authority as well as your insurance company and inform them that you will be paying these bills directly. You should also speak with these professionals to figure out exactly how much tax and insurance premium you are require to pay, then budget accordingly.

Speak with your insurance agent to understand the minute details of your contract and make changes if necessary. At this point, you are the one who calls the shots. You can change the mode of payment, the premium price and other details as convenient. It is also important to have firsthand knowledge on what your insurance covers.

Use the extra money wisely

Yes, you have a lot of extra funds now that your mortgage is completely repaid. However, this is not an excuse to be irresponsible with your money. With this extra cash flow, you can actually start new plans for the future, be it for a second home or for other profitable investment opportunities. Being a responsible homeowner and taking a few smart financial decisions is a great way to build and create wealth.

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