Property Ownership
In NJ, a 'satisfaction of mortgage' is recorded to:
ACreate a new mortgage
BRelease the mortgage lien from the property when the loan is paid in full✓ Correct
CTransfer the mortgage to a new lender
DIncrease the loan amount
Explanation
When a mortgage is paid in full, the lender provides a satisfaction of mortgage (discharge), which is recorded in the county clerk's office to formally release the lien from the property's title.
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Key Terms to Know
Lien
A financial claim against a property that serves as security for a debt or obligation, giving the creditor the right to foreclose if unpaid.
Discount PointsPrepaid interest paid to a lender at closing to reduce the mortgage interest rate, with each point equal to 1% of the loan amount.
Abstract of TitleA condensed history of a property's title, summarizing all recorded documents and encumbrances affecting it from the earliest record to the present.
Short SaleA sale of real property where the sale proceeds are less than the outstanding mortgage balance, requiring lender approval.
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