pay off mortgage? or keep a penny?

wilse_2

Hi all

Me & partner are in the fortunate position to pay off out mortgage.
Many people tell me to keep a token 1p or £1 in my mortgage, funnily enough no-one can tell me why!

Can anyone shed any light on this please? I posed this question to the mortgage company who just said, "you need to speak to an independant financial adviser".

Cheers ears

wilse

:snow_laug

aliasojo

AFAIK this is something to do with the deeds. If you have an outstanding amount left on your mortgage then the mortgage company hold your deeds, otherwise you have to pay to have them held safely.

Now I've typed that I'm not 100% sure that's right, lol.

jfdi

When we cleared ours 2 or 3 years back we checked this.

With C & G we had to keep £100 outstanding balance for them to retain the Deeds.

The interest on that was cheaper than renting a Safety Deposit Box etc.

Just ask about Deed retention, they should know!!!!

Ian_W

Hi wilse,
Aliasojo's post is along the right lines though I'm not sure lenders, these days, will actually allow you to keep such a small sum outstanding on your mortgage.

When we redeemed our mortgage with Coventry they offered to keep our deeds [actually in our case, the original lease as our house is l/h] for a fee of £25 which, I think, was one-off rather than annual. The drawback is they don't discharge their legal charge over the property with the land registry but obviously the account is zero.

These days the Land Registry has electronic copies of the title so the paper deeds are less important than once was the case but may still be useful for disputes about things like rights of way, who's responsible for mending shared boundry fences etc. We decided to keep our l/h at home in a fire proof safe we already own, with a photocopy at a family members house.

If you tell your lender you want to redeem the mortgage they'll probably let you have details of their particular scheme for storing deeds and if you do want to know if they will allow you to keep £1 on your mortgage you may need to speak with someone who deals with redemptions rather than just call centre staff.

HTH & BoL.

PS: What does AFAIK mean? Seen it in a lot of post but haven't yet figured it out.

oldmotherreilly

AFAIK='as far as I know'? That's what I would guess anyway!

carly

You need to speak to your lender to determine exactly how their system works and what their charges are. they will easily be able to tell you this.

I was in your position last year and found that my B.Soc charged £25 per year to hold onto the deeds and another £25 per year to "manage " a dormant account!
I found that it was cheaper to pay a one off £150 pounds to get the deeds released to me, although i regarded that charge as excessive, too. As another poster has said deeds are now kept electronically so i have no worries about losing/damaging deeds by keeping them in a cupboard at home with my other important documents, as I previouly might have done.

depending on your lenders terms and conditions you may have several options

Weymouth_Man

We were lucky some 2 years ago to pay our mortage off with Nationwide, it was either £1 or £10 required to hold our deeds for free.

Happy New Year

aliasojo

Just out of curiosity....what would happen if the lender's building went up in flames and all documents were lost????

Weymouth_Man

aliasojo wrote:

Just out of curiosity....what would happen if the lender's building went up in flames and all documents were lost????

I Hope they are held in a fire proof container or vault ?

skintchick

I have my deeds following a mixup when I remortgaged - I keep them at home. It's fine - most things are online these days so the deeds are less important.

innovate

How can I find out whether my deeds are online / kept on a database?