can they make my friend pay off his mortgage?

homersimpson_3

today my friend rang mortgage provider and told them he wanted to pay off mortgage apart from £1. he left £1 there because (a) mortgage provider will hold onto deeds and (b) he may want to borrow against house in future. mortgage provider calculated redemption figure; said they would put stop on monthly mortgage payments for 6 months and review it then. he would still have to pay interest on £1. put stop on it because not in their interests to collect only a few pence each month.
please advise (1) was mortgage provider correct and (2) if he doesn't borrow against house in next 6 months can they make him pay off mortgage when mortgage reviewed. mortgage fully flexible.
thanks

Hawksmuir

Can't get my head around why he wants to leave the balance as £1. Why not pay off in full, if he needs to remortgage he can with any provider. And why does he want the BS to hold the deeds ?

Merlin139

It might be to save the Mortgage Redemption Charge.

Mine with the Yorkshire Building Society is £199.00

homersimpson_3

Can't get my head around why he wants to leave the balance as £1. Why not pay off in full, if he needs to remortgage he can with any provider. And why does he want the BS to hold the deeds ?

because he can borrow and pay back at will as mortgage fully flexible - (i.e. borrow £500 in month 1 and pay it next month.) and he doesn't want to pay deeds release fee.

Xbigman

Check the terms and conditions of his mortgage. It is likely that if he leaves a small amount like £1 on it they will take £1 as a minimum payment eventually.
As for the deed release fee. The banks are pumping these charges up every year. The smart move is to pay off the money now and avoid increased deed release fees in the future. Likewise, having credit available is not nescesarily a good thing. If he pays off his mortgage he should have no trouble getting an unsecured loan in the future, or better yet, with no mortgage to pay he should be able to save up money for any bigger purchases.
Regards



X

Johnhowell

Also, remember that Banks, Building Societies and Solicitors do not have to be paid to look after the deeds. Land Registry Act 2002 states that deeds do not have to held as ownership details are held centrally in Peterborough.

How many "old school" home owners are still paying £25 a year or having a £1-100 mortgage for the bank to hold their deeds?

Just pay the redemption fee and own your home outright - get rid of the bank off your back.

If you need money later on you still own the property to raise money - probably at a better rate than your present lender.

John

regularsaver1

its a lot easy to borrow with a mortgage, even if its only £1

once mortgage free it is not as easy