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Simple English definitions for legal terms
satisfaction of mortgage
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A quick definition of satisfaction of mortgage:
A satisfaction of mortgage is a paper that shows the borrower has paid back the whole mortgage, which means they own the property without any debt. The paper has information about the loan, how the lender is no longer allowed to claim the property, and what needs to happen to transfer the property title. The lender has to make this paper and everyone involved in the loan and property has to sign it.
A more thorough explanation:
Definition: A satisfaction of mortgage is a legal document that proves the borrower has paid off their mortgage in full. This document releases the lender's lien on the property and gives the title to the borrower. It includes details about the mortgage loan, conditions that relieve the lender from a lien against the property, and the steps needed to transfer the property title.
For example, if you take out a mortgage to buy a house, you will sign a contract with the lender. This contract gives the lender a lien on the property, which means they have the right to take possession of the property if you fail to make your mortgage payments. Once you have paid off your mortgage, the lender will prepare a satisfaction of mortgage document that proves you have fulfilled your obligation and that the lien on the property has been released.
Another example is if you sell your house and use the proceeds to pay off your mortgage. In this case, you will need a satisfaction of mortgage document to prove to the buyer that the property is free and clear of any liens.
Overall, a satisfaction of mortgage is an important legal document that proves you have fulfilled your obligation to the lender and that you now have full ownership of your property.