to pay or not to pay

guitarman266

Hi, new member here. I will soon be able to pay off my mortgage, approx £35000. However ,,a thought....If I do NOT pay it ALL, but leave say £50 or £100 owing,. if I should need any money for an extension/future purchase or whatever, I will STILL be classified as an "EXISTING CUSTOMER".. whereby I will benefit from much better rates, and less hassle applying as my LTV will be super. The current pressure is on companies to give best deals to Established customers, not just to tempt "newbies". Also it means they still have a duty to look after the deeds in their vaults, saving me the hassle. The alternative of ending my tie with them by paying ALL th emortgage,,and then needing money in the future.,,,might be Equity release....a FAR more costly option. Any experts out there who can advise pros and cons?? Or maybe this makes YOU:beer: think??/Many thanks.

gavted

Hi guitarman,

When I reached your position, I paid it all off. I then saved the money that I was spending on the mortgage and OPs to build up a safety fund.

A friend, unbeknownst to me, was doing the same, but left £1 on mortgage at Nationwide. Largely for the reasons you stated.

I dont know which is best, but my understanding is that all deeds are now held electronically by the Land Registry. So its not worth holding on for that benefit. We even got the paper copy of ours when we remortgaged 10 years ago.

As for borrowing more at a later date, I think if you fit the criteria regarding LTV and credit worthiness, you wont have a problem getting a new loan. UNless you have a deal where you can borrow back what you have OPed, in which case you would save a large arrangement fee. You need to check the small print on your deal.

Not having a mortgage, or even a ridiculously small one, is a great weight lifted. Even if you dont currently feel like you have anything hanging over you.

Good luck with your decision.

edinburgher

As for borrowing more at a later date, I think if you fit the criteria regarding LTV and credit worthiness, you wont have a problem getting a new loan. UNless you have a deal where you can borrow back what you have OPed, in which case you would save a large arrangement fee. You need to check the small print on your deal.

Valid points. Whether or not you're an existing customer won't matter much unless you meet the affordability tests etc. that will be the same for all. Having an existing mortgage hasn't made much difference to the customers who have never missed a payment, but find themselves in changed circumstances. The newspapers were full of such stories for a while 'I never missed a payment in 20 years and now bank x won't let me remortgage' etc.