Mortgage paid off — now what?

people would appreciate knowing the steps to take when their mortgage is finally paid off. I read your column in the Columbus Dispatch. Thanks for all the knowledge you’ve shared over the years. A:

You’re right. It’s a great thing to be done with paying your mortgage, particularly if it has taken you 30 years to get to this point. One thing you mentioned was that you’ll miss the tax benefits you received by having a mortgage. The reality is that you get the most tax benefit in the early years of the loan. Remember, in the early years of a loan that is amortized over time, you pay mostly interest and in the later years, you’re paying mostly principal.

Since only mortgage interest payments are deductible on your federal income tax return, it’s unlikely that you’ve seen much benefit from your loan payments for quite a number of years. I any case, it would be a declining benefit because each year you pay off a portion of the equity and then pay less in interest the following year.

Also, the benefit you get from deducting interest payments depends on how much you are able to deduct, the amount of money you make and other factors. Having said that, any benefit you can get on your federal income taxes may be good for your bottom line.

Once you’ve paid off your loan, you need to tell your insurance carrier that you no longer have a lender on the home. If you have a casualty (like a fire or a tornado hits your house) and your lender is still named as a mortgagee on your homeowners policy, you may have to deal with that old lender to get your money. It’s hard enough dealing with insurance companies to then have to deal with a lender that may or may not have a record of your old mortgage.

Keep in mind that insurance companies may cut a check payable to you and your lender, if your lender is named as a mortgagee on your insurance. Once you pay off your loan, you’re best off not having that lender named on your insurance.

As far as paying your real estate taxes, you should have been receiving copies of your real estate tax bills over the