Why owe £1 on a mortgage and not pay it off?

Slasher_2

Does anyone have any information as to why my parents owe just £1 on their mortgage and have been advised by the Halifax not to pay this off for many years? Is this a common thing?

I'm concerned because my father has recently been diagnosed with terminal cancer and I am tasked with understanding both my parents assets at this difficult time. The house will go entirely to my mother and I want to make sure there are no problems for her. Why would it not make sense to pay the mortage off in full ?

Jockthearab

Sorry to hear about your father.

As I understand it, as long as there is money owed, then the lender keeps hold of the deeds, thus ensuring they are kept safe at little cost to the borrower

stuwilky

Usually because the bank will hang on to the deeds for free on an outstanding debt. Otherwise the charges are pretty high.

smokeysmate

I'm not an expert but my dad owes Abbey 50 pence on his mortgage and it has something to do with them holding the deeds for him. I'm unsure as to whether he is also charged for the privilege.

Slasher wrote:

Does anyone have any information as to why my parents owe just £1 on their mortgage and have been advised by the Halifax not to pay this off for many years? Is this a common thing?

I'm concerned because my father has recently been diagnosed with terminal cancer and I am tasked with understanding both my parents assets at this difficult time. The house will go entirely to my mother and I want to make sure there are no problems for her. Why would it not make sense to pay the mortage off in full ?

Slasher_2

Thanks for the quick replies, that puts my mind at rest.

Being a member of the MSE Board I'm naturally suspicious of financial corporations!

stuwilky

Slasher wrote:

Thanks for the quick replies, that puts my mind at rest.

Being a member of the MSE Board I'm naturally suspicious of financial corporations!

And wisely so Slasher ;-)

Sorry to hear about your dad.

DiggingOut

You probably ought to get answers on whether this arrangement will be allowed to continue after your father's death. Presumably, the debt is in both names, so may have to be paid off. Deeds will probably have to be put solely in her name.

Ugly little complication that they may have a good way to handle for her, but it would be good to ask so you know.

theGrinch

not all banks and building societies charge to hold deeds, but I can see the sense of leaving a £1 just to keep the deed with existing lender. Did you ask if they would charge for this service?

Foxy

slasher can i just say my thought are with you. my mum was diagnosed with terminal cancer in may and i lost here in october so i know what you are going though.

if you ever need anyone to talk to your welcome to pm me

take care my thoughts are with you

foxy