Discharge of Mortgage
A Discharge of Mortgage is a legal document that releases a borrower from the obligations of a mortgage once the loan has been fully paid. It serves as proof that the lender has relinquished their claim against the property used as collateral for the mortgage.
When a borrower takes out a mortgage to purchase real estate, they provide the lender with a security interest in the property. This means that if the borrower defaults on the loan, the lender has the right to foreclose on the property. However, once the borrower fulfills their repayment obligations, the lender issues a Discharge of Mortgage, effectively canceling the lien against the property.
This document is typically recorded with the county or local land records office to provide public notice that the mortgage has been satisfied. It is crucial for the homeowner to obtain and maintain a copy of this document, as it confirms that they own the property free and clear of the mortgage lien.
For example, if a homeowner has a mortgage of $200,000 and successfully pays off the loan, the lender will prepare a Discharge of Mortgage stating that the mortgage is fully satisfied. This allows the homeowner to sell the property or transfer ownership without any encumbrances from the original mortgage.
A Discharge of Mortgage is essential for protecting the homeowner’s title to the property and ensuring they have clear ownership free from debt obligations related to the mortgage.
« Back to Glossary Index