Paying off the Mortgage

kazzy428

Hello everyone

I'm a newbie and I apologise if my question is one of those that has been answered a thousand times!

Here goes

I am in a position to pay off my outstanding mortgage but a friend of mine has told me, as I am relatively young, that it is not a good idea to pay off entirely as it reflects your credit rating. Therefore, once I pay the mortgage off my credit rate will plummit and I will not be able to get any of the 0% credit card deals again or any other 0% credit deals for that matter i.e. on furniture etc.

I would be grateful if someone could advise me if this is correct and if it is, what amount of mortgage should I leave outstanding to enable me to still be eligible for these 0% deals should I want to make use of one in the future.

Thank you in advance for reading my post.

betmunch

What makes your friend so sure of this?

Nothing is set in stone, having a mortgage and paying it does reflect well on your credit file, but just because you dont have one deosnt mean you wont get further credit.

People in rented accomodation still get the 0% deals so why shouldnt you after you have paid off your mortgage?

kazzy428

Thank you for replying. She just planted a seed in my head and it's been going round and round. It just made me wonder about the future, especially as I can't predict what my needs will be.

Can I ask another question? I have a decreasing life insurance policy on this mortgage, (has another 10 years to run), do you know whether it would be better to let it run or cancel it. I have no dependents.

betmunch

If you have no dependents why do you have it in the first place?
Is your mortgage in joint names?

I cant tell you if you should cancel it or not.

Think about this, if I died who would I want to benefit from this policy paying out? Is that knowledge worth the monthly premium you are paying?
Dont forget, it ends in 10 years, and the pay out is going down each month!

You can then make your own decision on it.

kazzy428

Thank you very much for all your help. You have made me view my questions in a different way to how I was.

You can probably tell, I'm rather naive and live within my financial means.

Thank you again. You will be pleased to hear I have no more questions.

betmunch

Hahaha no worries.

With these things you need to think what would you do if you required a pay out. Decreasing Term Assurance is designed to pay off a repayment mortgage, which you will no longer have so you need to decide if paying your premium is worth the money.

I suspect I know what your opinion is, but its important that you form your opinion and act on it, rather than just asking a random forum member: Do I need this? Because most will come back with their own opinion, which may not match your own.

Enjoy being mortgage free

SuzieSue

I paid off my mortgage in full 3 years ago and my credit rating has not been affected at all as far as I can tell. I recently applied for the Halifax 22 month 0% on purchases credit card and was accepted with no problem with a credit limit over £10,000.