Which document acknowledges the payment of a mortgage debt?

The document that acknowledges the payment of a mortgage debt is known as a satisfaction of mortgage. When a borrower pays off their mortgage, this document is issued by the lender to confirm that the debt has been fully satisfied. It serves as a formal release of the mortgage lien against the property, indicating that the borrower owns the property free and clear of the mortgage obligation.

The satisfaction of mortgage marks the conclusion of the lender-borrower relationship regarding that specific loan, reinforcing that the borrower has fulfilled all their obligations under the mortgage agreement and promoting clarity in property ownership records. Recording this document with the appropriate governmental office (like the county recorder) provides public notice that the mortgage has been paid and the lender's claim on the property has been extinguished.

Understanding this is crucial for both lenders and borrowers, as it protects the rights of homeowners and informs potential future buyers about the status of the property in terms of encumbrances.