If You Pay off Mortage is it Impossible to Lose House?

pennypincher3562

Hi

I'm presently jobless, and have been living off my savings for 9 months. I've applied for benefits, and that is currently being processed.

My remaining mortgage balance is £576. Should I pay off this balance to ensure I 'cannot lose my house.'

I don't expect to get into serious financial difficulty, but savings are running low. 4 months left.

Paying off mortgage will reduce savings to about the 3 month level.

On top of paying off the 576 quid, I will need to pay the lender about £200 for coming out of the mortgage early. Since I'm in Scotland I will also supposedly have to pay a solicitor a couple of hundred also (to finalise things.)

What do you think? It would be a huge psychological boost to know 'I own this place, and nobody can take it off me.'

Cheers
PennyPincher3562

edinburgher

Well, if we're *really* silly, I believe the council could bankrupt you or attach a charge against your property if you refuse to pay council tax, but I don't think you'd lose the house. In any case, you don't have to pay CT when unemployed, do you?

pennypincher3562

I've also got Factor's charges that come to about £1200 a year. I'm thinking that paying it off would actually be a bad move (depleted cash resources.)

Obviously you need to pay the factor and building insurance. They can't have one resident who decides 'I cannot pay.'


So I'm thinking now, paying off mortgage in my current situation is a false sense of security. In my predicament 'cash is king.'


What do you think?


Cheers
Pennypincher3562

PasturesNew

Other debts could, eventually, lead to you losing the house.... and, in your current position, with so little outstanding, it seems daft to pay off the mortgage (and pay a fee) when the risk is sooooooo low that you won't be able to keep up the mortgage payments.

If I were you I'd sit smugly thinking "all this is mine" anyway ... and keep the £500+ as living money for now.

You've more chance of tripping over an alligator on your front doorstep and breaking your neck than losing the house, to be honest.

pennypincher3562

I think you are right PasturesNew. I had never really thought about this carefully before. I used to 'dream' if you paid off mortgage it was yours forever, but I really doubt that.

So it looks like for me 'job is king.'

Cheers
Pennypincher3562

edinburgher

I also live in a Scottish property with a factor, the contract with the factor is set up so that we are basically joint and severally liable if someone doesn't pay their fees. The other tenants are legally bound to cover the shortfall and would be expected to get their money back from the offending party. Again, this could lead to someone trying to force you into bankruptcy.

Agree with PasturesNew's assessments that you're better off keeping the money and that there's next to no chance of you losing your home.

Sounds like a good position to be in, hope you find a job soon

robotrobo

pennypincher3562 wrote: »

Hi

I'm presently jobless, and have been living off my savings for 9 months. I've applied for benefits, and that is currently being processed.

My remaining mortgage balance is £576. Should I pay off this balance to ensure I 'cannot lose my house.'

I don't expect to get into serious financial difficulty, but savings are running low. 4 months left.

Paying off mortgage will reduce savings to about the 3 month level.

On top of paying off the 576 quid, I will need to pay the lender about £200 for coming out of the mortgage early. Since I'm in Scotland I will also supposedly have to pay a solicitor a couple of hundred also (to finalise things.)

What do you think? It would be a huge psychological boost to know 'I own this place, and nobody can take it off me.'

Cheers
PennyPincher3562

i wouldnt pay off all my mortgage , keep a minute money open with them. reason being , if & when things buck up for you & you may want to move in the future ! , then the door should still be open for you & spouse to borrow more money for a future move , or upgrade , just a thought. good luck:)

edinburgher

I don't really think that's a consideration. OP will still be expected to go through affordability checks etc. again, the existence of a £500 charge remaining against the house doesn't magically mean that more money can be borrowed no questions asked.