How to make your final mortgage payment correctly and what to do after it’s paid off

What is needed to register ownership of an apartment in connection with closing a mortgage loan?

Making the final mortgage payment allows the borrower to complete the loan agreement and obtain a mortgage on the living space. Removal of the burden occurs in several stages:

Contacting the bank. After repaying the loan, you need to get a mortgage from the bank and a document with a note stating that the lender has no claims against the client, since he has fulfilled his financial obligations.
Receiving an account statement. You need to ask the bank for an account statement proving the loan has been repaid. This is done as a safety net so that subsequently no disagreements arise between the lender and the client.
Contacting the registration authority. With the received papers, the owner of the mortgaged apartment needs to contact Rosreestr.
Data is entered into the Rosreestr database indicating that the apartment is completely free of encumbrances. If desired, the apartment owner can order a new certificate for living space without a note stating that the apartment is secured by the bank.

Procedure for issuing a mortgage

The pledge for the purchased object is formalized in the form of a mortgage - a valuable registered paper that regulates the relationship between the banker and the client on the issues of pledge and liquidation of debt. The document specifies the most important terms of the contract. If disagreements are identified between the mortgage agreement and the mortgage note, then the latter has priority rights - be careful when drafting it.

A mortgage can be obtained without a mortgage. The bank needs it to sell the collateral in case the borrower violates its obligations. The new owner of the mortgage does not have the right to change the terms of the mortgage agreement.

The main purpose of such documents is to attract finance in the mortgage market. If necessary, the financial institution sells its reserve of mortgages and frees up working capital.

If the registration of a mortgage was accompanied by the drawing up of a mortgage note, after the final repayment of the debt, the lender is obliged to give this document to the borrower (after drawing up an act of transfer of the mortgage). The original copy must contain a note stating that all obligations have been fulfilled and there are no claims against the borrower.

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Next, enter the date and amount of the last payment. The next step will be to lift restrictions on housing from the relevant authorities. They issue a mortgage within two weeks if there is a bank representative in the city. If the document is stored in the central office, which is located in another city, the procedure may take a month.

What to do next if the debt is paid off early?

If you intend to repay your mortgage early, the borrower needs to notify the bank about this with a statement. To avoid mistakes when making the last payment, it is recommended to check with your mortgage manager about all the details of early repayment. The bank employee will recalculate the remaining amount and determine the payment that will need to be made.

After paying the funds, the borrower needs to obtain a certificate from the bank confirming the termination of financial obligations and termination of the mortgage agreement. Next, all that remains is to remove the encumbrance from the apartment in Rosreestr.

Closing the relationship with the bank

Pay due attention to the procedure for closing relations with a credit institution so that problems do not arise over time associated with debts, fines, and encumbrances.

What will you need?

The borrower must take care of himself to complete the process of repaying the mortgage debt. On the part of the borrower, it will be necessary to have free time, maintain order and carefully check the correctness of the documents.

Two papers will serve as proof of repayment of debt to the bank:

certificate of debt repayment;
statement confirming the zero balance of the loan.

Step by Step Actions

The procedure for closing a debt is as follows:

Request for a statement of the amount of debt.
Making the final payment according to the schedule, in any convenient way.
In case of early repayment of debt: notify the bank in advance and deposit the amount by the due date of the next payment.
Confirm the fact of repayment of the debt with a certificate confirming the closure of the account and the absence of claims from the credit institution.
Write an application for a mortgage.
Receive a mortgage note indicating full fulfillment of debt obligations.
Collect documents and apply to Rosreestr to remove the encumbrance.
Receive an extract from the Unified State Register indicating recognition of ownership.
Keep all mortgage documents in a safe.

Unfortunately, the media often hears news about the cessation of the existence of one or another financial institution. In this case, borrowers need to check with the bank who will be the holder of the mortgage in the future.

Once the mortgage holder has been identified, the standard procedure for removing the encumbrance from the apartment will need to begin.

The procedure for closing a mortgage consists of 8 steps:

Obtaining a bank statement showing the outstanding balance on your mortgage loan.
Making the final mortgage payment to the bank's cash desk.
Submitting an application to close the mortgage account and the mortgage itself.
Obtaining a certificate of no debt from the bank.
Issuance by the bank of a mortgage after the mortgage has been paid off.
Repayment of the mortgage and removal of the encumbrance from the apartment.
Allocation of shares to children if mat capital was used.
Refund of unused insurance.

First of all, the borrower needs to know the exact amount of the last payment. If an error is made in the calculations and the full amount is not paid down to the last penny, he will not be able to properly close the mortgage. Consequently, the pledge in favor of the bank will continue to be valid. Then, subsequently, difficulties will arise when registering the apartment as your own.

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Expert opinion

Bank notification about repayment

After the entire mortgage has been paid off, you need to go to the bank and apply for a mortgage release. The application must indicate:

Full name of the applicant;
address of the property;
loan agreement number and amount;
a request to remove the encumbrance in connection with the fulfillment of financial obligations and to issue a mortgage on the apartment.

The application is processed on average for about 14 days, after which the borrower is issued a mortgage and a letter confirming the removal of financial obligations from him. According to paragraph 2 of Art. 17 of the Federal Law “On Mortgage”, the lender is obliged to immediately return the mortgage to the borrower upon fulfillment of his obligations under the agreement.

Procedure after repaying the mortgage

Once the final mortgage payment has been made and the debt owed to the lender has been fully repaid, there are still some steps that need to be taken to comply with the formalities.

In order for the bank to make changes to the payment schedule, it must receive your notification of early fulfillment of loan obligations. The current mortgage repayment procedure allows you to notify the lender of your intention in one of the following ways:

come to the office and write a corresponding application in the form accepted by the given credit institution;
call the call center;
log into your personal account on the bank’s website and make an online transaction for early repayment of the loan.

Removal of encumbrance: independently or through intermediaries?

The whole procedure can take a lot of time. Collecting documents, waiting for the papers to be ready, visiting the bank and the registration authority - these stages of registration will require strength and patience. Those who do not want to waste time on paperwork can turn to lawyers or realtors who provide such services.

In order to close a loan agreement through intermediaries, you will need to issue a power of attorney from a notary.

Based on this document, the specialist will be able to represent the interests of the property owner in the bank and in the registration authority. He will prepare all the documents and carry out the necessary procedures to remove the encumbrance from the apartment.

Documentation

After receiving the papers from the bank, you need to go to Rosreestr at the location of the property and submit an application to remove the encumbrance. Along with the application you will need to provide the following documents :

letter from the bank about fulfilled obligations;
mortgage on an apartment with a note about the repayment of the loan;
document confirming ownership of real estate;
a copy of the loan agreement;
owner's passport;
check for payment of state duty;
court decision (if the loan was repaid through the court);
contract of sale.

New certificate of ownership or extract from the Unified State Register?

When signing a contract for the purchase and sale of mortgaged real estate, a note is made in the certificate of ownership that the property is under an encumbrance. After all restrictions are lifted, the document was subject to replacement until 2020.

Since July 15, 2016, when registering ownership of real estate, instead of a certificate, an extract from the Unified State Register is issued. The document contains all relevant information about the property at the time the certificate was issued: its characteristics, owner details, registered ownership, encumbrance (if any). The extract can be obtained free of charge only once.

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Repeated certificates of ownership are also not being issued now. If a previously issued certificate is lost, the characteristics of the object, the owner's name are changed, or an encumbrance (mortgage, arrest) is removed, the copyright holder can receive an extract for a fee.

Before visiting the registration chamber, you must pay a state fee (200 rubles) - otherwise the application will not be accepted. It takes up to two weeks to issue the document. The list of paid services of the bank may also include the preparation of documents for the removal of encumbrances. In such cases, bank employees will settle all formalities themselves.

Statement

The application shall indicate the following information:

Full name of the owner, his residential address.
Address, name of the credit institution and its details.
Information about the mortgage: bank agreement number, term, amount, grounds for termination of the agreement.
A phrase about the absence of obligations both on the part of the bank and on the part of the borrower.
Purpose of the statement.

The application is signed by both parties - the homeowner and the bank representative.

You will find a list of documents required to remove the encumbrance and information on further steps here.

State duty, cost of obtaining a re-certificate and other expenses

Removing the encumbrance in Rosreestr is a free procedure, but for making changes to the Unified State Register you will need to pay 200 rubles.

Additional possible costs:

Submitting papers through intermediaries will cost an average of 2 to 5 thousand rubles.
Plus registration of a power of attorney for an intermediary at a notary – 200 rubles. according to the tariff and about 1,500 thousand for drawing up the document.
Obtaining a new certificate of ownership will cost 350 rubles. It is made at the request of the apartment owner.

When registering a mortgage and registering the transaction with the authorities, the owner is issued a certificate of real estate with a note that the apartment is pledged. After the mortgage is paid off, the owner can receive a new certificate without this mark.

Contact Rosreestr

On the agreed day, the homeowner and the lender’s representative meet at Rosreestr and sign the application to remove the encumbrance on the property. If the borrower applies independently to the authorities, without the other party to the agreement, then he must present a power of attorney on behalf of the bank. The employee accepts the documents and issues a receipt indicating the date when you can appear for new papers. On the appointed day, the owner needs to pick up a new certificate. To do this, it is enough to present your passport and receipt.

What is the procedure for repaying a mortgage registration record and how to submit an application and documents to Rosreestr, read here, we talked about how the mortgage encumbrance is removed at the MFC, Rosreestr or through the State Services website.

The concept of encumbrance and the procedure for removing it from a mortgaged apartment

The next step is to pay off the mortgage registry.
The Federal Law “On Mortgages” (Article 25) implies that the encumbrance can be removed from the Office of the Federal Service for State Registration, Cadastre and Cartography. In some localities and cities, this service is also available at the MFC.

To do this you will need the following package of documents:

Borrower's passport;
The original certificate confirming the fulfillment of obligations in full - must be printed on company letterhead and have all the necessary details and signatures;
Mortgage from a lender;
Power of attorney to remove the encumbrance if a bank representative cannot accompany the client during the procedure;
Statement of the established form on behalf of the borrower;
Receipt of payment of the state fee (cost is 200 rubles, and is paid only when you need a certificate without encumbrance marks).

If the mortgage was issued without a mortgage, the lender and borrower need to write a joint application to remove restrictions on the property. In addition, the mandatory presence of a bank employee with a power of attorney at the MFC will be required.

After all the necessary documents are transferred to Rosreestr, the encumbrance on the property will be removed, and the former borrower will become its full owner and will be able to carry out any transactions with the property - sale, donation, etc.

Clearing a registration usually takes about 3-5 business days, and all information about the status of your case will be freely available on the registration authority's website.

Encumbrance refers to the process of registering a mortgage on an apartment purchased on credit. This procedure is considered a guarantee of further payments from the borrower. Without it, obtaining a mortgage to purchase a home is impossible.

A mortgage is a (registered) security that regulates collateral relations, as well as issues of debt repayment between the lender and the borrower. The document specifies the basic terms and conditions of the mortgage that are essential. If the provisions do not comply, the mortgage is considered a more significant legal document compared to the mortgage agreement.

If the client maliciously evades payment of fees, the banking organization, on the basis of the mortgage, has the right to confiscate the mortgaged apartment and subsequently realize (remortgage, sell) it to pay off the debt.

Having fulfilled the payment obligations, the owner should begin to remove the burden from the apartment. The procedure boils down to the following steps:

Receive the original mortgage note from bank employees. The document must contain information:

on the client’s fulfillment of all obligations to the creditor;
about the absence of claims against the borrower (a note is made on the back of the mortgage document);
about the date of the last payment.

The mortgage note is certified by the signature of an authorized bank employee.

Contact the local branch of Rosreestr or MFC. All apartment owners must contact the authority, having previously collected a package of necessary papers.

To contact the registration authority, apartment owners must collect the following documents:

mortgage (original) – issued in one copy to all owners;
written confirmation of the closure of the mortgage - the document is drawn up on the letterhead of the banking organization with details, seals and signature of authorized employees;
personal documents (passports) of all owners (for minors under 14 years of age - birth certificates);
power of attorney (if he is not present) from the bank employee who executed the mortgage document;
agreement on the acquisition (purchase and sale) of an apartment;
requirement to remove the encumbrance;
loan agreement – there is no need for a document if a bank employee accompanies clients during the procedure;
check for payment of the duty - the duty is 200 rubles (paid when ordering a new extract from the Unified State Register of Real Estate, in which there are no records of the burden).

The registration service will remove the restriction from the apartment within 3-5 days. All data on a specific loan case can be found on the Rosreestr website.

If, when issuing a loan, the bank refused to draw up a mortgage, then when contacting Rosreestr to remove the encumbrance, the owners and the bank provide a joint application. The presence of a representative of the creditor is mandatory.

To avoid getting into a difficult situation, it is necessary to take into account all the nuances regarding the closure of a mortgage agreement:

It is imperative to make the final payment after finding out the exact amount of the debt, from the bank’s point of view. Otherwise, a penny debt may result in a large fine.
Close the current account to which monthly contributions were transferred so as not to pay for its maintenance.
If the client does not agree with the statement of the amount of debt, it is better to pay it. And only then figure it out and, in case of overpayment, write an application for the return of the overpayment.
It is necessary to go through the procedure for removing the encumbrance. Otherwise, when the need arises to carry out some actions with real estate, it will be impossible to do so.
In case of loss of the mortgage note, the mortgagee shall draw up a duplicate of it in full compliance with the original. And if, after repayment of the debt, a lost one is found, it will not have legal force.
If the loan was repaid ahead of schedule, you can demand the return of part of the insurance.

In order to legally confirm the right of the new owner to the purchased property, you should contact the state registration authorities. In the Russian Federation, a special state body, Rosreestr, is responsible for entering data on changes in the owner of residential real estate.

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The procedure for this legislative act is strictly regulated and divided into the following stages:

Submission of a package of documentation by the new owner to the state registrar;
Checking the availability of all necessary copies of documents by the employee;
Conducting a legal examination of the transaction and all other circumstances provided;
Indication of identified deficiencies (if any);
Making a decision to satisfy the requested action;
Entering relevant information into the Electronic Register of Real Estate Owners;
Drawing up an extract from the Unified State Register of Real Estate, which is the title document of the new owner of the square meters.

Each legislative procedure involves the formation of a specific package of documentation. This need is due to compliance with all letters of the Law, in accordance with a specific procedure. Registration of ownership of an apartment is no exception and requires the submission of certain documents.

Each individual case has its own list, but the main ones do not change:

Documents identifying the identity of each participant in the transaction;
Application for state registration of changes in Rosreestr;
Payment order from a banking institution regarding payment of fees for registration activities;
contract of sale;
Certificate of title of the previous owner;
A mortgage agreement and a mortgage note, which stipulates the conditions for the return of funds and the conditions for the borrower to take full ownership of the property;
Technical passport for the apartment;
Certificate from their Housing Office about registered persons in the apartment;
Documentary confirmation of the absence of debts on utility bills;
If the apartment is jointly owned, then notarized consent of the other half or shared owners;
Special guardianship permission in cases where there is a minor child among the sellers.

When purchasing an apartment with a mortgage on the secondary housing market, it is important to clarify all the important points in the documents before conducting a transaction to re-register property rights. The main points that are important for the buyer are the absence of debt on utility bills, legal redevelopment, if any, and the availability of all supporting documents.

An apartment purchased with a mortgage is registered with Rosreesr using a standard package of documents. After checking the provided documents and making the necessary entries in the main register, the official is obliged to provide the new owner of the apartment with an extract from the Unified State Register on the specified date. The date of issue of documents is indicated in the receipt for receipt of the documentation package.

Registration of ownership of an apartment purchased in a new building is more difficult than on the secondary housing market. The transfer of full ownership in this option will occur only after completion of construction work and commissioning of the residential building.

Before going to court you need to obtain a mortgage from the bank. It is provided only after the apartment has been assessed for a mortgage and a corresponding report has been prepared for the bank. The basis for completing the assessment will be the availability of a cadastral and technical passport for the apartment, which in turn are issued only after the developer has delivered the house.

Possible difficulties

In order for the procedure to be quick and successful, the apartment owner should learn about some nuances and difficulties:

You should not immediately contact the bank with an application for a mortgage immediately after making the last payment. Closing a loan agreement can take up to 1 month. It is best to start the procedure after 30 days from the date of loan repayment.
Before making the last payment, it is recommended to request a certificate from the bank with the balance of the amount in order to know exactly how much to pay.
When receiving papers from the bank, check their contents. All documents must bear the lender's seal and signature. According to clause 7 of Article 17 of the Federal Law “On Mortgages”, the mortgage note issued by the bank after repayment of the loan must contain o.
If there is a small balance of mortgage debt after making the last payment, the bank will not release the mortgage on the apartment. Before receiving it, the borrower needs to fully repay the loan, even if it is just a couple of rubles.
You should not delay the procedure. There are no fines for this, but it is better to resolve all issues as early as possible, otherwise you will have to restore all documents to the bank later.

Closing a mortgage agreement and removing the encumbrance from a home is a simple process, but it requires care from the borrower. First of all, he should make sure that he has no debts and that he has fulfilled his obligations to the bank in full.