Any disadvantages? 8 May 2016 at 2:27PM in Mortgage-free wannabe 2 replies 814 views

Catatonia

Just wondering if there are any disadvantages to being mortgage free.

1) I have heard that it can have a negative impact on a credit score - is this the case if you have other credit e.g. credit cards paid in full each month, 5% car loan paid each month? Will it make it more difficult to get a mortgage in future if you want to get money for house renovations or moving to a new place?

2) Do mortgage companies still hold the deeds, and without a mortgage company is there a need to pay for secure storage of these?

edinburgher

1. Not really, credit scoring is far more sophisticated these days than just mortgage? yes/no. Employment, credit history and affordability are more important.
2. Can't speak for all companies, but [email protected] sent ours back to us very quickly into the life of our mortgage, I get the impression that lenders are less keen to hold the deeds these days?

ZTD

edinburgher wrote: »

2. Can't speak for all companies, but [email protected] sent ours back to us very quickly into the life of our mortgage, I get the impression that lenders are less keen to hold the deeds these days?

I believe the land Registry holds everything electronically, and so deed are just useless bits of paper, so are of no interest to banks/building societies. However, for hysterical raisins, people like deeds (sometimes they have info on exact boundaries) so are keen to keep them.

Just keep them in a fire proof box and they will be fine - no real loss if they are lost.