semi-retirement planning- accessed pension..paying off mortgage?

curlytop12

Hi, just got my nhs  1995 pension, I'm going to reduce my hours to 22.5 a week and hopefully build up some savings.
I've no debts , but minimal in savings at the moment, just been living month to month...
lump sum covers the outstanding balance on my mortgage and about 7k left over that I'll put in a savings account as a buffer.
Someone told me I shouldn't pay it off completely due to the deeds needing to be held by a bank??
Is that true?
Any other advice welcome Can't quite believe this time has come, I started my pension when I started work and never really gave it a thought..

Pat38493

curlytop12 said:

Hi, just got my nhs  1995 pension, I'm going to reduce my hours to 22.5 a week and hopefully build up some savings.
I've no debts , but minimal in savings at the moment, just been living month to month...
lump sum covers the outstanding balance on my mortgage and about 7k left over that I'll put in a savings account as a buffer.
Someone told me I shouldn't pay it off completely due to the deeds needing to be held by a bank??
Is that true?
Any other advice welcome Can't quite believe this time has come, I started my pension when I started work and never really gave it a thought..

Whether you should pay off some or all of your mortgage is more a matter of what interest rate you are paying on the mortgage, and what is your attitude to risk, and also whether there are early payment penalties for paying it off early.

For example if you are currently on a fix at 2% or less like some people, it arguably doesn't make sense to pay off your mortgage as you can make a 5% return on the money in the meantime by putting it in a savings account, or even better returns in other investments.

On the other hand, a lot of people say that they get a kind of psychological benefit from knowing their mortgage is paid off regardless of the cost/benefit analysis.

I don't think the deeds should be an issue either way - if the bank is holding the deeds they have to give them back to you if the mortgage is cleared.

Brie

Is the bank actually holding anything?  Isn't it all virtual now??

I'm liking the paid off mortgage myself.  It means that the money that you paid the bank each month can now go elsewhere.  Into a regular savings account, into an ISA or pension.  Your choice.  

curlytop12

Oh, I'm paying it off , I'll need to pay £700 early redemption which I have budgetted for. It is the deeds thing That I am unsure about- is it virtual? How do I get them in my possession? 
Anything else to think about?
Oh, what about the term life insurance- do i stop paying that as I won't have a mortgage to pay off when I die??

thank you all

Brie

Check the T&Cs on the life insurance.  Will it still payout if you don't have a mortgage or is it just life insurance?  Is there someone that you have as beneficiary who will really need this ££ if you suddenly are gone?  So often it's to pay off the mortgage so that the OH and kids don't have to worry about that.  Do you have that kind of family?  fyi - my parents stopped paying for life insurance when all of us were old enough to look after ourselves and instead got critical illness type cover for us instead.  

Call the bank and ask about the deeds.  That's the best way to know for sure rather than strangers guessing!!

Brie

Oh and check what life insurance you get through work.  A lot of us are duplicating things.

Hoenir

curlytop12 said:

Oh, I'm paying it off , I'll need to pay £700 early redemption which I have budgetted for. It is the deeds thing That I am unsure about- is it virtual? How do I get them in my possession? 

Everything is online at Land Registry. Paper records are now totally redundant. 

xylophone

Deeds? 

Is your house registered at the Land Registry?

Pat38493

xylophone said:

Deeds? 

Is your house registered at the Land Registry?

I think this is probably very old information - many years ago I think that the bank kept the physical deeds of your house until your mortgage was paid off.

SVaz

Check on the Land registry to make sure the property is on there.  Make sure you get the deeds when you pay off your mortgage either way.
You don’t ‘need’ them if the property is already registered but they are very nice to have and keep,  lots of interesting history on them.  

You DO need them if the property is unrgistered ( unlikely )  - to prove ownership. 

Secret2ndAccount

If the property has changed hands since 1990 it will be registered. Therefore the deeds are stored digitally at the Land Registry. A couple of stories to relate
When I paid off my mortgage it transpired that the bank had lost my deeds... It has never bothered me and never been an issue so far. I downloaded a digital copy from the Land Registry.
When my sister paid off her mortgage, She kept the debt open at £1. The bank did not charge her any interest, and stored her deeds for free for years. I think this is what the OP is referring to, but it's non-current info in my view. It was a pretty old house. There were some moderately grandiose papers in the package, but nothing written with a quill and sealed with wax.
It does seem to me that the land registry only stores a basic version of the deeds - the ownership and the outline on a map. Much less than the big stack of papers my sister had. I wonder if the paper deeds are of any use in resolving detail issues. For example, my deeds contained a covenant that said I couldn't build a shed. That is long lost (and I now have a nice shed, as does every house in the street). What happens if somebody comes up with the documents that say none of these sheds is allowed?