Legal Definitions - dismortgage

Dismortgage refers to the act of paying off a mortgage loan in its entirety, thereby releasing the property from the lender's claim or lien. It signifies the borrower regaining complete, unencumbered ownership of the property, free from the financial obligation of the mortgage.

Here are some examples illustrating the concept of dismortgage:

• Example 1: Standard Loan Repayment

  After 30 years of consistent monthly payments, Mr. and Mrs. Chen make their final mortgage payment on their family home. Once the bank confirms receipt of this payment and all outstanding balances are cleared, the property is considered dismortgaged. The bank will then issue a release of lien, formally acknowledging that their claim on the property has been extinguished, and the Chens now own their home outright.

• Example 2: Property Sale

  Ms. Rodriguez decides to sell her condominium. At the closing of the sale, a portion of the proceeds from the buyer is used to pay off the remaining balance of Ms. Rodriguez's mortgage. This payment to her lender constitutes a dismortgage, as it fully satisfies her outstanding loan obligation, allowing the property to be transferred to the new owner free of her previous mortgage.

• Example 3: Early Payoff

  Mr. Davies receives a significant bonus from his employer and decides to use the funds to pay off the remaining principal balance of his home loan, which still had 15 years left on its term. By submitting a lump sum payment that covers the entire outstanding amount, Mr. Davies dismortgages his property years ahead of schedule. His lender will then process the payoff and remove the mortgage lien from his property's title.