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    • lisyloo
    • By lisyloo 10th Feb 18, 8:33 AM
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    lisyloo
    Is it better to keep a mortgage?
    • #1
    • 10th Feb 18, 8:33 AM
    Is it better to keep a mortgage? 10th Feb 18 at 8:33 AM
    I am in a fortunate position to be able to pay off our mortgage later on this year when the term ends. It's currently offset and with First Direct.
    I have read in the past that it's worth keeping a mortgage, both for a line of credit and also to prevent fraudulent transactions. Also anecdotally I've heard your more likely to get credit with a mortgage on your credit file.

    It would be a low LTV but DH runs a limited company and has 4 years worth of books. I have a permanent job.

    How complicated is this? are the benefits worthwhile and will the fees be worth it? For example do we have to pay for another survey if LTV is low? Any relevant experience with FD and does the limited company thing complicate matters?

    If I pay off the mortgage I believe the fees are only £149.
Page 2
    • lisyloo
    • By lisyloo 10th Feb 18, 6:42 PM
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    lisyloo
    Sorry. I thought we were talking about future benefits, not what you'd accrued in the past.

    Seems there's plenty of unanswered questions before any conclusion can be reached...
    Originally posted by kingstreet
    Just to be clear my perception of perceive FUTURE benefits of extending/remortgaging are

    1) having a charge on the property makes it much harder To carry out a fraudulent transaction than an unencumbered property

    2) having a large and cheap line of credit available for the next 15 years at minimal cost (zero interest if fully offset). A mortgage may not be available to us in 2 years time if (for example) DH retires.

    3) anecdotally Iíve heard that a mortgage on a credit report can be an advantage. I admit this I should more tenuous and purely anecdotal.

    Quite happy to answer any other unanswered questions.
    • lisyloo
    • By lisyloo 10th Feb 18, 6:44 PM
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    lisyloo
    In future, if you need one, a remortgage of an unencumbered property can be done free.
    Originally posted by kingstreet
    We can probably remortgage now for 15 year so until state pension age.

    If DH retires in 2 years time then I donít believe weíll be able to get a mortgage.
    • minimike2
    • By minimike2 10th Feb 18, 6:46 PM
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    minimike2
    Keeping a mortgage open just to have it reporting onto your credit report is really not worth it.
    • lisyloo
    • By lisyloo 10th Feb 18, 6:51 PM
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    lisyloo
    You won't be able to keep your existing low interest rate mortgage, If that's your hope.
    Originally posted by Thrugelmir
    No I was not expecting to keep BOE + 0.49% :-)

    But I think Iíve established that new mortgage fees, survey and legal fees would be involved (and any others I might have forgotten).

    Itís probably not worth it for us (no forseeable need for credit), but I can see the potential benefit of a long term fully offset (zero interest) mortgage especially if (like us) you might be able to get line of credit until state pension age, but are cut off from that as soon as you retire. (My understanding is that working people can usually get a term until state pension age, but you canít once retired even if your income is good and more guaranteed than income from work).
    • lisyloo
    • By lisyloo 10th Feb 18, 6:52 PM
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    lisyloo
    Keeping a mortgage open just to have it reporting onto your credit report is really not worth it.
    Originally posted by minimike2
    Ok. What 1) and 2).
    • minimike2
    • By minimike2 10th Feb 18, 7:10 PM
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    minimike2
    1) Again, the chances of it are so low that it is just pointless keeping a mortgage in place for that reason.

    2) If you look to extend the term of the mortgage it will be assessed just like a new mortgage would be. If the income will not sustain the mortgage for 15 years, the term extension will not be granted anyway.
    • Thrugelmir
    • By Thrugelmir 10th Feb 18, 7:10 PM
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    Thrugelmir
    (My understanding is that working people can usually get a term until state pension age, but you canít once retired even if your income is good and more guaranteed than income from work).
    Originally posted by lisyloo
    Affordability criteria would determine that you've already built up a sufficient pension entitlement now. Even with work there's no guarantee. If your occupation is that of a brick hod carrier , roofer, plasterer etc. Might be reservations as to your ability to maintain your occupation up until state retirement age. Whereas working in a call centre offers far less challenge.
    Financial disasters happen when the last person who can remember what went wrong last time has left the building.
    • lisyloo
    • By lisyloo 10th Feb 18, 7:14 PM
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    lisyloo
    1) Again, the chances of it are so low that it is just pointless keeping a mortgage in place for that reason.

    2) If you look to extend the term of the mortgage it will be assessed just like a new mortgage would be. If the income will not sustain the mortgage for 15 years, the term extension will not be granted anyway.
    Originally posted by minimike2
    1) thanks

    2) our office based work could easily sustain the mortgage for 15 years (especially as we can choose how much it will be). What happens if we get the mortgage on that basis (at say 52) but decide to retire at say 55 and not 67? My understanding is that you only get assessed once so nothing happens, is that correct?
    So could we get a mortgage until 67 (if we meet all criteria) and then later choose to retire at 55 but keep the mortgage? Yes or no?
    If yes then what I!!!8217;m saying is we can get a 15 year mortgage at 52, but can!!!8217;t if we try to get one if we retire at 55. Is that right?
    Last edited by lisyloo; 10-02-2018 at 7:18 PM.
    • davidmcn
    • By davidmcn 10th Feb 18, 7:17 PM
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    davidmcn
    1) having a charge on the property makes it much harder To carry out a fraudulent transaction than an unencumbered property
    Originally posted by lisyloo
    But not impossible, and anyway the risk is almost zero, especially if you're living in the property (no chance of a tenant or squatter pretending to be a vendor).

    Assuming the property is in England & Wales you can sign up for the Land Registry service to notify you of any applications against the property. Not worth all the cost and hassle of a new mortgage.
    • lisyloo
    • By lisyloo 10th Feb 18, 7:33 PM
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    lisyloo
    Great thanks 1) and 3) ruled out. I suspect 2) is not worth it for us but I!!!8217;m still interested to know if I!!!8217;m right that you can keep a mortgage if you retire earlier than expected, but you can!!!8217;t get one once retired even though your income is more secure.
    • minimike2
    • By minimike2 10th Feb 18, 8:36 PM
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    minimike2
    You seem to be looking at this in the wrong way.

    The question you should be asking is "Do I need to borrow money on a mortgage"? That involves the need to use the funds.

    If the answer is no, then there is no reason to do so. Forget the rest of the theoretical paranoid stuff about fraud. And as for borrowing when retired, yes it can be done, but WHY do you want to be borrowing at that stage in your life when you have the house paid for.

    Do you actually NEED to borrow for something?
    • lisyloo
    • By lisyloo 10th Feb 18, 10:46 PM
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    lisyloo
    No I don!!!8217;t need borrowing, I!!!8217;m just interested in whether I!!!8217;ve understood the position correctly out of curiosity.
    • goodwithsaving
    • By goodwithsaving 10th Feb 18, 11:42 PM
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    goodwithsaving
    Lisyloo, if you've made up your mind and are dismissing any advice/other POV (even from respected brokers who are on here) then why even ask!
    Every time you borrow money, youíre robbing your future self. ĖNathan W. Morris
    • lisyloo
    • By lisyloo 11th Feb 18, 9:50 AM
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    lisyloo
    Gosh not sure where that opinion came from.
    Im grateful for all the facts/opinions/answers offered and taking it all on board AND changing my opinion.
    No idea at all why you think Im ignoring advice/facts.

    Ive seen plenty of threads where people wanted a mortgage going into retirement but couldnt get a term past retirement age even though that often defies logic (pension payments being more guaranteed than work income).

    I am merely trying to complete knowledge.
    You are wrong to conclude that I am ignoring advice just because I still have unanswered questions.
    Its the other way round, I WANT to be corrected. Thats why Im here ! (Sorry bout the apostrophes - must be my iPad)

    My outstanding questions are

    1) is it usually that you cant get a term past state retirement age
    2) if you retire earlier than expected do you just get to keep you mortagage?
    Last edited by lisyloo; 11-02-2018 at 9:55 AM.
    • Thrugelmir
    • By Thrugelmir 11th Feb 18, 11:39 AM
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    Thrugelmir
    My outstanding questions are

    1) is it usually that you cant get a term past state retirement age
    2) if you retire earlier than expected do you just get to keep you mortagage?
    Originally posted by lisyloo
    1. Anything is possible. All down to meeting affordability criteria. Remember losing one partners pension income could have a significant impact on the overall household income.

    2. No different to losing ones job or a other change in circumstances. Providing the mortgage continues to be paid. Then the mortgage lender wil take no action as there's been no breach of contract.
    .
    Financial disasters happen when the last person who can remember what went wrong last time has left the building.
    • lisyloo
    • By lisyloo 11th Feb 18, 11:03 PM
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    lisyloo
    Thanks for all the answers folk. I will be paying off the mortgage later in the year and will be officially mortgage free - psychologically I like that.
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