What Does It Mean to Release a Car from Mortgage?
4 Answers
Releasing a car from mortgage refers to the process of canceling the mortgage registration for a vehicle purchased with a mortgage loan, which means the mortgage right is terminated at the vehicle management office. Below are the procedures and required documents for releasing a car from mortgage: Procedures for releasing a car from mortgage: First, you need to apply to the vehicle management office where the mortgage was registered. Second, submit the required documents to complete the mortgage release registration. Finally, after the vehicle management office reviews and approves the application in accordance with regulations, they will archive the relevant documents, input the information, endorse, and issue the vehicle registration certificate, completing the mortgage release process. Required documents for releasing a car from mortgage: Identity proofs of the vehicle owner and the mortgagee. If the process is handled by an agent, the agent's identity proof is also required. If the agent is an organization, the original identity proof of the handling personnel and a written authorization from the vehicle owner must be submitted. The vehicle registration certificate. If the mortgage is released through a court mediation, ruling, or judgment, the effective "Mediation Agreement," "Ruling," or "Judgment" issued by the court, along with the corresponding "Notice of Assistance in Execution," must be submitted. If the mortgagee is an organization that has been deregistered, proof of the organization's deregistration must also be submitted, which can include a query certificate issued by the industrial and commercial department and proof of the mortgagor's repayment.
I just went through this process recently. Simply put, when you take a car loan, the vehicle is mortgaged to the bank. Removing the mortgage means truly making the car your own property. My green vehicle title originally stated it was mortgaged to XX Bank. After repaying the loan, I scheduled an appointment with the bank to get the loan clearance certificate. Then I went to the DMV with my ID card and waited in line for two hours. The counter stamped a mortgage release seal on the registration certificate, and only then did the car fully belong to me. Don't forget this procedure - otherwise you'll face hassles when selling or transferring ownership later, as the DMV system will keep showing the mortgaged status. Plus, if the bank retains your original green title, it could be troublesome during vehicle inspections. By the way, I recommend calling in advance to confirm required documents - I almost forgot my residence permit.
Lifting the mortgage is the process of completely freeing the car from the bank's control. When I took out a car loan three years ago, the bank registered a mortgage with the vehicle management office, effectively locking the ownership rights. After paying off the loan early recently, I immediately contacted the finance company to obtain the release documents. Note there are two scenarios here: if it's manufacturer financing, they usually mail you the release documents to handle yourself; for bank mortgages, some may assign a specialist to accompany you. I went alone with the required materials—mainly the vehicle registration certificate, loan clearance proof, authorization letter, and copies of both parties' IDs. The moment it was done, I finally felt the car truly belonged to me; otherwise, it always felt like driving the bank's car.
Removing the mortgage means lifting the lien on the vehicle from the loan. My buddy didn't realize he hadn't done this until half a year after paying off his car loan, and it caused a hiccup when he tried to sell the car. The process is actually quite simple: after clearing the loan, contact the financial institution to get the lien release documents, then take the vehicle registration certificate to the DMV to complete the procedure. The key point is that the mortgage information section on the registration certificate will be stamped and canceled, giving you full disposal rights. Don't underestimate that stamp—without it, your car remains technically mortgaged and can't be sold or transferred. I personally prefer manufacturer financing to avoid hassle, as they send someone to assist with the lien release, making it much easier. Remember to keep the lien release receipt safe, and it's best to take a photo and store it in the cloud.
