£1 nominal mortgage account

mf78

Hi

We're in a position now to pay off completely our mortgage with Nationwide. Theyve sggested we keep £1 in the account as a nominal fee on which they wont charge any interest and no repayments will be taken. The idea is if we need to remortgage we can quickly get the money as the account is already approved and in place. I cant find much on the net about these sort of deals. The positives seem to be that they'll keep the deeds (so we dont need to pay a solicitor or bank a yearly fee to look after them) and the remortgage thing.

However, we're not likely to be remortgaging or moving in the forseeable future. I cant help but hear alarm bells ringing over this, am i being over cautious? What would people recommend? There must be some downsides to this.

Thanks

chardir

I think this is fairly standard. When I paid off my mortgage with Coventry BS they offered to store the deeds and keep the account open in case I wanted to borrow again. It's for mutual benefit - you get your deeds stored for free and they hope to keep your custom.

mf78

Thanks for the reply. Can anyone think of a reason not to go ahead with the offer?

george_jetson

I am in a similar position as you - I have saved enough to clear my offset mortgage but have decided to keep it on with a balance of £0. For me the advantage is that I have access to a line of credit (albeit secured on my house) should I need it in the future - mid life crisis and all that

I thought deeds were electronic now, so there are no longer the same concerns about storing them securely?

george_jetson

PS congratulations about becoming mortgage free! There's nothing like it, is there?!

JonnyBravo

george_jetson wrote: »

I thought deeds were electronic now, so there are no longer the same concerns about storing them securely?

Deeds certainly are electronic now so take this bit out of the equation while you think about your options.

I don't keep mine at a bank or solicitors and when we recently changed the name on the deeds from me to my wife they didnt want them to update them etc as it's all "on computer". No need for them to be any more secure than anything else eg your bank details etc.

JonnyBravo

mf78 wrote: »

Thanks for the reply. Can anyone think of a reason not to go ahead with the offer?

No.

But nor can I think of a reason for you to do it with you not wanting to move/re-mortgage in the near future.

It's not that important either way IMO.

co123456

By keeping the mortgage open, and benefitting from access to readilly available credit, would this work against you if you wanted to apply for a credit card expecting a reasonably high limit?

MoneySavingNovice

Is you house registered with the Land Registry?

If so you don't need to store your deeds at a solicitors anyway - you can always prove who owns the property via the Land Registry. (Personally I have found the old deeds I have for my house very interesting, they are of no use apart from historical interest)

The other question is there are conditions which Coventry place on you which my make you prefer not to take this offer. I am thinking of the must buy insurance for the house from the lender rule, which may make this financially interesting for them.

If it was me I would finally ask myself if I would need to borrow money in the future - if the answer is no, turn them down and get your deeds back!

mf78

Thanks for all your help, we've decided to go ahead and just close the mortgage entirely. No worries about any unforseen charges, buildings insurance and any future trouble. Didnt know about deeds being electronic now, which was one of the main reasons we were even considering this!

And yes it feels great to be rid of the mortgage! Now my wife can afford to go part time in her job so she can spend more time with the kids (and me, seeing as i work from home anyway).

Thanks folks