You paid off your mortgage, congratulations! Now you own your home free and clear, and it is time to get your records organized and reevaluate your finances. After all, that mortgage payment was a big part of your monthly bills. Now you need to think about your monthly budget. Let’s examine 9 things to do after you pay off your mortgage.

  • Make sure to get key documents from your mortgage company. 
  • Remember to pay your property taxes and homeowner’s insurance. 
  • Revisit your budget now that you don’t have that big monthly mortgage payment. 

Now that you paid off your mortgage your whole financial situation will change. Here are some things to think about as you plan on what to do next.  

Make Sure You Get Key Documents Associated with Your Loan 

One of the most important things to do after you pay off your mortgage is to make sure you get key documents associated with your loan. Your bank was always on the ball to make sure you paid your mortgage every month on time, but they may not be as punctual about getting you the appropriate documents after that final payment. Here is what you should look for from your bank within two or three weeks: 

  • A balance paid-in-full statement – Sent to you. 
  • A certificate of satisfaction – Sent to your local records department. 

You must verify that the bank sent the certificate of satisfaction to your local records department. This action removes them from your deed. While they should do this for you, it is still your responsibility to make sure. In some cases, they send the certificate directly to you, and you must file it with the records department yourself.1  

Items You are Responsible for After You Pay Off Your Mortgage 

There are still many bills you are responsible for after you pay off your mortgage. Some are obvious, while others you may not think about because you paid them through an escrow account. Mortgage companies set up these accounts to make sure that you pay taxes and insurance bills on time. You pay this escrow each month as part of your mortgage payment. Many people do not even think about it. It is just part of the mortgage payment. The bank has specific reasons why they want these paid from escrow: 

  • Taxes – If you do not pay your taxes, the government puts a lien on the property that supersedes your bank’s lien. They never want to be second in line. 
  • Homeowner’s insurance – If this expires, then the bank probably will not be able to recoup the loss in the event of a catastrophic loss, such as a fire. 

After you make your last payment, it is up to you to arrange to keep paying these bills. First, call your local county clerk. While you verify that the bank sent them a certificate of satisfaction ask them to whom you should make tax payments and how often those payments are due.  

Second, call your insurance company about your homeowner’s policy. In many cases, they call you. They will walk you through the process of setting up payments now that your mortgage is paid off.  

Things to do After You Pay Off Your Mortgage: What to do With Extra Money 

Not having to pay a mortgage bill each month is a big deal for your finances. For most families, it is between $1,000 and $2,000 a month. For some people, it may be less, and for some, it may be more. That is a lot of money, and it may seem like a windfall for you. However, think carefully before you start spending more than you usually do. So, what should you do now? Here is a game plan.2  

Revise (or Make) a Budget 

Since you already have a budget that you follow closely you can easily rearrange your spending and savings to seamlessly manage your new financial situation. That is not you? Honestly, it is not me either. 

For most of us, we made a budget when we bought our house because we needed to cut back on spending so we could pay our mortgage each month. Now that the mortgage is gone, you may be tempted to go on a spending spree. Before you do that, though, pull out the budget you made and dust it off. Revise it and really think about it before you go out to the mall or open your favorite shopping site on your computer.  


Yes, celebrate! When you revise or make, that budget leave a little to celebrate your success. For most people that is a 30-year accomplishment. In that amount of time, there are lots of financial ups and downs. You weathered all those storms and saw the commitment through to the end. That accomplishment is worth celebrating.  

You may celebrate over a nice dinner at a nice restaurant, go shopping, buy a piece of jewelry to remember the event, or take a long-overdue vacation. Whatever you decide, do not neglect this. It is important to commemorate the event. 

Top Off Your Emergency Fund 

Now that you revised, or made, a budget (boring) and celebrated (Yeah!) it is time to get serious about your savings and other debts. Your emergency fund is a critical part of your budget. When you rework it after your last mortgage payment, you should look at your emergency fund and adjust.  

  • Add up all your monthly bills. 
  • Make sure your emergency fund is adequate to cover them for at least 3 months. 
  • If you do not have enough money in this fund, then make monthly deposits into it. 

If you have at least three months’ coverage, you may think about adding until you can pay at least six months. On the other hand, you may prioritize paying off debts or adding to retirement savings, depending on your situation.  

Pay off Other Debts! 

We believe that your emergency fund and debt reduction or equally important. The reason the emergency fund is so important is that a catastrophic event can lead to overwhelming, often high-interest, debt.  

Therefore, we recommend that you balance building your emergency fund with paying off debts. Having said that, Look at your budget again. How much can you afford each month to pay down debts while you build that emergency fund? After you have that number, then: 

  1. Prioritize your debts. 
  2. Pay as much as you can each month on your top-priority debt. 
  3. After you pay off one debt pay as much as you can to the next. 
  4. Pay off all your debts as quickly as possible. 

You should prioritize your debts according to which have the worst terms. Usually, you want to pay off those credit cards first and car payments last.  

Increase Savings 

Don’t have any debt? That is great! Think about your savings. You may have some short-term savings goals, or you may want to shore up your retirement accounts. 

Short-term savings may include work you need to be done on your house. You may need to update your kitchen or bathroom(s). Also, you may want to add a deck or sunroom, finish the basement, or fix the driveway or sidewalks. These all add value to your property, and they will help when you are ready to sell. 

On the other hand, you may have dreamed about a special vacation for years, but money was always too tight. Memories with family and loved ones are impossible to value. Now that your mortgage is paid off, it may be the perfect time to make that dream a reality.  

Think about your retirement savings, too. Many people never save enough. A good financial planner can help you decide how much you should save to have a comfortable retirement. 

Final Thoughts on Things to do After You Pay Off Your Mortgage 

Again, congratulations on paying off your mortgage! Let’s review the steps you should take now: 

  1. Make sure you get your key documents from the mortgage company. 
  2. Check with your local county clerk to make sure your bank filed your certificate of satisfaction. 
  3. While you are at the clerk’s office, find out to whom you pay your property taxes and how often you must make payments. 
  4. Call your insurance company and arrange to pay your homeowner’s insurance directly. 
  5. Revise your budget. 
  6. Celebrate! 
  7. Top off your emergency fund. 
  8. Pay down other debts. 
  9. Increase your savings. 

These 9 things to do after you pay off your mortgage will help you manage your finances now that you own your home free and clear.  


  1. Value Penguin 
  2. Casandra Properties