Q: I bought a new home from the builder in 2011. Last month, I paid it off. (The) loan was through Bank of America. Do I need to do anything to register, record, etc.? If yes, where? Thank you.
— James C., Las Vegas
A: First of all, congratulations on paying off your home — and in such a relatively short period of time.
I don’t get this question very often. Maybe it’s because so few homeowners actually pay off their mortgage these days. Over the years, I’ve seen reports showing that Southern Nevada has one of the nation’s lowest percentages of homeowners who paid off their mortgage.
As a longtime local Realtor who also spent years working as a certified public accountant, I know different people have different views on paying off the mortgage on your home.
Some financial advisers will tell you that, in today’s economy, you should be able to invest your money in ways that earn a return greater than the current historically low mortgage interest rate you’re paying. So, to them, it makes sense to keep making your mortgage payments, especially when you can deduct the mortgage interest you pay on your federal income taxes.
Others will tell you that it’s a good idea to eliminate debt from your life if you can afford to do it and value that sense of security.
I’m sure it’s a good feeling to know that you don’t have to make another mortgage payment and that you own your home free and clear.
To me, it comes down to a personal decision. And you’ve already made yours.
To answer your question, I turned to some local experts for help. Please see below for a response from Jon Morgan, vice president and chief title officer of Equity Title of Nevada.
“This one is easy,” Morgan said.
“The simple answer is ‘no.’ When a loan secured by real property is paid off, it is ultimately the lender’s responsibility to see to it that the proper release or reconveyance document is recorded with the county recorder. State law requires the lender and/or the trustee to record this release or reconveyance document within a 66-day period after the loan is paid off. Failure to do so subjects the lender and/or the trustee to liability in a civil action,” he said.
David Sanders, general counsel for the Greater Las Vegas Association of Realtors, echoed Morgan’s advice that the lender is responsible for recording the necessary documentation.
However, Sanders added that homeowners who pay off their mortgage may want to monitor the website for their local county recorder’s office “to verify that has been done and to ensure nothing else is there that shouldn’t be.”
I would add that homeowners who are considering paying off their mortgage should check with their lender to make sure their mortgage allows them to pay off their loan with no penalty for prepayment.
Please keep sending your real estate questions to me at firstname.lastname@example.org so I can answer them in future columns.
Heidi Kasama is the 2014 president of the Greater Las Vegas Association of Realtors and has been a local Realtor for more than 11 years. The association has more than 11,000 members. Email questions to email@example.com. For more information, visit www.lasvegasrealtor.com.