Worth keeping £1 in Mortgage?

FlashBarry

This scenario is a few years away for me, but I thought I would ask...

Someone recently told me that it is worth keeping your Mortgage open even if the amount owed is very small like £1. They said that the Bank has the hassle of looking after the house deeds.

Is there any truth in this?

Can you actually keep the Mortgage open with £1 in it?

Beckyy

My solicitor keeps my deeds for free, I can't say there's any hassle involved and I would rather they were there than with a mortgage company.

The main benefit of keeping your mortgage with a nominal amount is that if you want to borrow more money in the future (new kitchen, extension etc.) you can increase your existing mortgage instead of taking out new debt and the interest rate on your mortgage may be lower than (e.g) finance on a kitchen.

If I'm honest I'd rather just get shot of it myself, but everyone is different. I'm sure somebody with more experience on the situation will be able to advise more.

pawlala

Deeds are electronic these days therefore there is no hassle in keeping something that doesn't exist in hard copy. The only reason to keep a nominal amount in a mortgage is to avoid paying an exit fee, AFAICS.

terryw

The concept of deeds is a little antiquated. The Land Registry store everything electronically and it is only £4 or so to obtain a copy from them.

The "deeds" themselves are of no financial value but worth hanging on to for historical/sentimental purposes. There is also a very small chance that buildings regs/ planing stuff might be in with the deeds and might be needed on resale.

Solicitors like to hang on to them for the simple reason that you are likely to go to that firm when you re-sell - or perhaps I am a tad cynical!

Becky's point about keeping the mortgage open in case of further loans has some consideration.

Personally, I would pay the mortgage off and put the file of "deeds" in the piano stool or the attic on the extremely unlikely chance that they are needed in the future.

gildius

I know someone who did this, to be better placed for getting loans in the future I think, rather than to do with deeds.

Land_Registry

terryw wrote: »

The concept of deeds is a little antiquated. The Land Registry store everything electronically and it is only £4 or so to obtain a copy from them.

The actual current land register and other data normally needed for dealign with a property is held electronically as terryw suggests. This informaiton is often all that is required for when you wish to sell, remortgage etc the property.

The register and title plan can be viewed online for a fee of £3 now for each

Take a look at our FAQ on Where are my deeds kept and if need be our online services