Ready to Kick Your Mortgage to the Curb? A Reconveyance Makes It Official
When you pay off your home loan, you'll need a reconveyance to clear the lien. We'll walk you through FAQs and ins and outs of this essential closing process.
When you (finally) ditch your mortgage, your lender issues you a deed of reconveyance, confirming that they relinquish you from your debt. Reconveyance is the process of removing the lender’s lien on the title of the property once the borrower (the homeowner) has paid the loan in full.
Whether you’re paying off your mortgage with home sale proceeds or other available funds, reconveyance is an essential step to cut ties with your lender. If you fail to complete reconveyance and recording, your mortgage remains as a lien on your property, impeding the title transfer to your buyer.
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To walk us through the ins and out of the reconveyance process, we spoke with Kenneth Bryant, a West Virginia real estate agent with more than 24 years of industry experience. He advises sellers to start the reconveyance process early in a transaction to avoid unwelcome surprises and prevent delays.
What is reconveyance, and why do you need one?
When you first bought your home, you signed a promissory note laying out your loan terms. Depending on your state law, you also signed either a mortgage or deed of trust, an agreement to use your home as collateral for the loan.
That agreement — the mortgage or deed of trust — is a legal record of the lien on your property. Your county or other local municipality’s recorder’s office retains a recorded copy of the document. If you were to stop making payments or otherwise default on the loan, that lien would give your lender the right to foreclose, and you could lose your home.
When you satisfy the terms of your promissory note and pay off your loan, your lender no longer has claims to your property. Reconveyance is the process of removing the lender’s lien from the property’s title once the borrower has paid the loan in full.
The specific reconveyance document your lender uses to process the reconveyance hinges on whether your loan is secured by a mortgage or deed of trust. Common reconveyance forms include:
- Mortgage release
- Release of mortgage
- Satisfaction of mortgage
- Mortgage satisfaction
- Deed of reconveyance
- Release of trust deed
While these documents go by different names, they all serve the same purpose: to confirm the loan payoff and remove the lender’s lien on the property title.
