You want the mortise plate to be flush. If it is not, the door will likely not shut correctly, or may not close at all.
[header] How to install a door latch attached mortise plate [title] Place the latch [or just the mortise plate] in place on the edge of the door. [step] Make sure it is centered on the cross bore hole and mark the perimeter with a pencil. This will allow you to know exactly where to chisel out the wood of the door so that the mortise plate fits nice and flush on the surface.