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Not paying off mortgage completely?

edited 30 November -1 at 1:00AM in Mortgage-Free Wannabe
5 replies 909 views
rhino_hornrhino_horn Forumite
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edited 30 November -1 at 1:00AM in Mortgage-Free Wannabe
My husband and I will be in the fortunate postiiton of being able to pay off our mortgage within the next couple of years. My husband has sold his business and we were planning on using the proceeds to clear off our mortgage.

However my dad recommended that we don't clear the entire mortgage but leave an amount in case we need it for the future. Am I being dim, but what advantage does that leave us with?

There is a possibility we would move to a larger, (more expensive) house within the next 5 years or so...which would mean taking out another mortgage. We're sensible with money and have never had an issue with getting finance before.

If anyone has words of wisdom.it would be appreciated :)

Replies

  • bexster1975bexster1975 Forumite
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    Hello

    I imagine your dad is thinking about you needing to reapply for a mortgage if you wanted to borrow again. As it is, you are likely to simply be able to extend your existing mortgage.

    None of us know what the future holds. I paid mine off because I'm pretty sure I don't want to get another mortgage.

    It's a bit of judgement call honestly.

    Congratulations on being in the position you are either way
    Bexster :)
  • greentgreent Forumite
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    I think that most mortgages now seem to be re-assessed if increasing them (?- pretty sure the rules have tightened up) so unless you have the option to re-drawdown funds from your existing mortgage account I'm not sure it's truly worth it? x
    I am the master of my fate; I am the captain of my soul
    Repaid mtge early (orig 11/25) 01/09 £124616 01/11 £89873 01/13 £52546 01/15 £12133 07/15 £NIL
    Net sales 2021 £209.04/£500 Decluttering 2021: 600/1000
  • RADDERSRADDERS Forumite
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    The main reason for keeping a small amount on a mortgage is that the provider keeps a charge on the property. So if you want to get extra funds in the future you would be apply8ng for a further advance.

    As the charge is already held then no solicitor fees would be payable by yourselves to do this work.
  • LorianLorian Forumite
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    I have a £125 mortgage - so my bank keeps my deeds safe for effectively nothing. I don't think many/any still do this though? I believe even my bank returned deeds to many customers but I know mine are still their safe, as I've accessed them recently.
  • greentgreent Forumite
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    You don't really have deeds nowadays on most properties - it's electronic records at LR. When we paid our mortgage off we just had a letter confirming all charges were released.
    I am the master of my fate; I am the captain of my soul
    Repaid mtge early (orig 11/25) 01/09 £124616 01/11 £89873 01/13 £52546 01/15 £12133 07/15 £NIL
    Net sales 2021 £209.04/£500 Decluttering 2021: 600/1000
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