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    • WorldTraveller
    • By WorldTraveller 24th Nov 17, 1:34 PM
    • 59Posts
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    WorldTraveller
    Mortgage now at zero balance!
    • #1
    • 24th Nov 17, 1:34 PM
    Mortgage now at zero balance! 24th Nov 17 at 1:34 PM
    Hello, we have just paid our mortgage off, leaving a zero balance but not yet closing it, we got here sooner than we planned.
    We are in our forties and had a ten year fixed rate offset mortgage that ended at the end of October (the mortgage itself being a 25 year term so in theory it had another 15 years to run) and have been putting all spare money into making overpayments, finally paying off the last little bit last week. We haven't yet closed the account as they said we could leave a zero balance. So this is what we've done, but I'm not sure if there are any advantages to completely closing it so that the house is officially owned by us and not the bank? Would appreciate any advice if anybody knows which is better, leaving it open just in case we need to access some funds again or closing it and having the house deeds sent to us.
Page 1
    • Nick_C
    • By Nick_C 24th Nov 17, 1:43 PM
    • 3,845 Posts
    • 5,288 Thanks
    Nick_C
    • #2
    • 24th Nov 17, 1:43 PM
    • #2
    • 24th Nov 17, 1:43 PM
    Is there a redemption fee? If there is, then no keeping your account open you will delay paying the fee. And if you have paper feeds, the lender will continue holding them in safe keeping for you.

    A few years ago, I was in a position to clear my mortgage early. I phoned up and asked if they would waive the redemption fee. They said no. So I went into a branch and paid off everything bar 5. My new repayments were 2p a month, collected by DD. They sent me letters everytime the interest rate changed, and sent me annual statements. This went on for a few years until my mortgage reached its term and I had to pay it off.

    If you are likely to want a further mortgage at some stage, this could be another reason for keeping your mortgage account live.
    • getmore4less
    • By getmore4less 24th Nov 17, 1:56 PM
    • 32,192 Posts
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    getmore4less
    • #3
    • 24th Nov 17, 1:56 PM
    • #3
    • 24th Nov 17, 1:56 PM
    Not sure why you did not just offset and keep the line of credit just in case you needed it.

    I kept mine going 100% offset.
    • Dia Pita
    • By Dia Pita 24th Nov 17, 1:58 PM
    • 92 Posts
    • 443 Thanks
    Dia Pita
    • #4
    • 24th Nov 17, 1:58 PM
    • #4
    • 24th Nov 17, 1:58 PM
    The problem with not clearing your mortgage is the bank still holds a charge over your property, if there is a redemption fee this was agreed to be paid when the mortgage was taken out. As long as you are okay with the bank having a call on your property don't clear it.

    Debt Free Aug 15 Mortgage Free Aug 16
    Early retirement 1/10/ 2016.


    • WorldTraveller
    • By WorldTraveller 24th Nov 17, 1:58 PM
    • 59 Posts
    • 64 Thanks
    WorldTraveller
    • #5
    • 24th Nov 17, 1:58 PM
    • #5
    • 24th Nov 17, 1:58 PM
    There's a closure fee of 149 which we can avoid by just keeping it at zero balance. I think we will just keep it as it is, but wondered if there are any advantages to having it completely closed. I don't think there are other than the thought that we will own our house ourselves, but obviously to all intents and purposes we do own it now if we have paid it off, and can close it at any time we wish to.
    • WorldTraveller
    • By WorldTraveller 24th Nov 17, 2:01 PM
    • 59 Posts
    • 64 Thanks
    WorldTraveller
    • #6
    • 24th Nov 17, 2:01 PM
    • #6
    • 24th Nov 17, 2:01 PM
    Not sure why you did not just offset and keep the line of credit just in case you needed it.

    I kept mine going 100% offset.
    Originally posted by getmore4less
    The credit is still available to us any time we want, we can just transfer funds from the mortgage account to our bank account if we need to, although I think this won't be necessary as we have savings as well.
    • getmore4less
    • By getmore4less 24th Nov 17, 2:10 PM
    • 32,192 Posts
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    getmore4less
    • #7
    • 24th Nov 17, 2:10 PM
    • #7
    • 24th Nov 17, 2:10 PM
    Which lender?
    • WorldTraveller
    • By WorldTraveller 24th Nov 17, 2:14 PM
    • 59 Posts
    • 64 Thanks
    WorldTraveller
    • #8
    • 24th Nov 17, 2:14 PM
    • #8
    • 24th Nov 17, 2:14 PM
    Which lender?
    Originally posted by getmore4less
    It's a First Direct offset mortgage.
    • WorldTraveller
    • By WorldTraveller 24th Nov 17, 2:17 PM
    • 59 Posts
    • 64 Thanks
    WorldTraveller
    • #9
    • 24th Nov 17, 2:17 PM
    • #9
    • 24th Nov 17, 2:17 PM
    The problem with not clearing your mortgage is the bank still holds a charge over your property, if there is a redemption fee this was agreed to be paid when the mortgage was taken out. As long as you are okay with the bank having a call on your property don't clear it.
    Originally posted by Dia Pita
    In practice what could it actually mean if they've still got a charge over the property, if we've paid it off? What financial and legal implications could it have in the future? The idea of completely closing it and owning it ourselves is tempting, but not sure whether it's better for credit purposes etc to still have a mortgage.
    • getmore4less
    • By getmore4less 24th Nov 17, 2:50 PM
    • 32,192 Posts
    • 19,349 Thanks
    getmore4less
    It's a First Direct offset mortgage.
    Originally posted by WorldTraveller
    they run their offsets interest only so if they will let you re draw down from a zero balance it is probably the cheapest money you will be able to get your hand on should you ever need.

    I would keep it just in case.

    Having a charge on you house can help stop people committing land reg frauds.
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