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    Should You pay Off a Mortgage ?????

    I have heard before that you should never "Fully" Pay Off your Mortgage and leave £1 in the account?

    What is the thinking behind this. ??

    31 Comments

    Banned

    interest on £1 is cheaper than paying someone to hang onto your deeds, and whilst the interest is so low any extra should be banged into somewhere with higher interest rates than your mortgage

    Its cheaper than paying someone to look after the deeds. As long as you owe £1 then the bank holds on to your deeds.

    I think it's different these days I bought my house last year and was given the deeds straight away, my granddad couldn't believe it he thought they had sent them me by mistake.

    Original Poster

    OK but does that mean as the mortgage is not yet fully paid then you do not own the property ??

    Banned

    rangermastiffs;8697993

    OK but does that mean as the mortgage is not yet fully paid then you do … OK but does that mean as the mortgage is not yet fully paid then you do not own the property ??



    of course it does, you never own 100% of the property whilst you owe money on it

    I overheard my outlaws talking about this and they said they were doing it to keep a relationship with the bank. Ive got a copy off my deeds. Why does the bank have to have a copy? is this in case you default payments?

    yep it's completely changed.
    Paid mine of a few years ago and they gave me the paper copies, but also hold electronic copies of 'paid-off' mortgages in case of emergencies.

    Well that was the TSB

    Banned

    danmc;8697992

    I think it's different these days I bought my house last year and was … I think it's different these days I bought my house last year and was given the deeds straight away, my granddad couldn't believe it he thought they had sent them me by mistake.



    you mean a copy of the deeds :thumbsup:

    sassie;8698008

    you mean a copy of the deeds :thumbsup:



    I'm not an idiot the original deeds:thumbsup:

    It means your deeds are safe in the hands of the bank. If you were to be given them and lose them you'd be in trouble if you tried to sell as its your only proof that you own the property, them being the original copy. I think

    Banned

    danmc;8698022

    I'm not an idiot the original deeds:thumbsup:



    you will not have the original deeds if you have an outstanding mortgage, which the op does

    danmc;8698022

    I'm not an idiot the original deeds:thumbsup:



    I'd keep them in a fireproof box or safe if I were you.........

    sassie;8698026

    you will not have the original deeds if you have an outstanding mortgage, … you will not have the original deeds if you have an outstanding mortgage, which the op does



    They were original documents the cover letter even suggested I pay for the solicitor to store them for me?. Like I said my granddad couldn't believe it as usually they are only sent once the mortgage has been paid in full, apparently they don't hold the same significance as they once did as the details are now stored digitally by the land registry office.

    One more important thing to think of is ?
    If you need a loan at a great rate add it to you mortgage no credit check no hasle no time
    the norm in account next day etc.
    No fees also so over all a great deal

    I think part of the idea of it being best to owe something on a mortgage comes from the days of MIRAS - mortgage interest relief at source - which was a kind of tax break if you had a mortgage. But that went in 2000.

    Most solicitors will hold on to your deeds free if you used them to purchase your property or you can store them safely in your own house, i was advised deeds are not important as they once where as they are all backed up on computer now

    sassie;8698026

    you will not have the original deeds if you have an outstanding mortgage, … you will not have the original deeds if you have an outstanding mortgage, which the op does



    FAILED badly,,,

    longbowassassin;8700116

    FAILED badly,,,



    How rude.

    I am sure i have my deeds as well, and i have a mortgage. I had a folder about 7/8 inches thick full of paper work. It had everyone who had ever lived in the property and what they paid for it. Also had peoples death certificates included.

    They said the banks weren't going to hold them anymore due to space

    Banned

    danmc;8698107

    They were original documents the cover letter even suggested I pay for … They were original documents the cover letter even suggested I pay for the solicitor to store them for me?. Like I said my granddad couldn't believe it as usually they are only sent once the mortgage has been paid in full, apparently they don't hold the same significance as they once did as the details are now stored digitally by the land registry office.



    i clearly wasnt aware of this, do you know when this came in? mine must still be with abbey as never had mine sent to me
    longbowassassin;8700116

    FAILED badly,,,



    yes i did, but you learn something new everyday

    sassie;8700269

    i clearly wasnt aware of this, do you know when this came in? mine must … i clearly wasnt aware of this, do you know when this came in? mine must still be with abbey as never had mine sent to me



    Not sure tbh , I bought my house around 14 months ago if that's any help?

    Supermod

    sassie;8700269

    i clearly wasnt aware of this, do you know when this came in? mine must … i clearly wasnt aware of this, do you know when this came in? mine must still be with abbey as never had mine sent to meyes i did, but you learn something new everyday



    Compulsory registration came in following the Land Registration Act 1997.

    Deeds are now simplified in a document called an "Official Copy". They hold no significance for ownership but they should still be kept safely.

    so...
    in answer to op's title question, the answer is yes, since the cost of deeds are now zero (financially)?

    Banned

    I keep £100 in my NW account so they keep the deeds.

    I hold my own deeds, so that wouldn't be relevant to me. However I always thought it was easier to remortgage, or take out a future loan secured against your property if you already had a mortgage however small. Regardless, I intend to pay mine off asap. It's a whacking great chain around my neck, and life would just be easier without it. Council tax comes a close second... (it's more than my first mortgage was!)

    Deeds are worthless nowadays, everything being held electronically by the land registry people. I wouldn't be paying anyone to hold onto them, they are sitting in a filing cabinet underneath my PC. They are certainly not the first thing I'd grab in a fire. They are of great interest (in an older property) but nothing more. There was a thread on here a while back...

    Original Poster

    thanks for all replies ...

    I already know the deeds are held 'electronically' by the land registry, I own more than one property and have the paper ones for each house already and as has been pointed out they are about worthless !!

    The thinking seems to be as I thought, that it makes further borrowing easier as they would just add it to the £1 or so that has kept the account open and it would be at the mortgage rate at that time which is generally always the 'cheapest' form of borrowing.

    I am more concerned now with the question of Ownership and who calls the shots !
    For example if you have a mortgage on a property then 'you' do not own it as with a car...
    So if you wanted to make alterations to the house you need permission from the lender (Bank)
    If you want to 'let' it you need permission from the lender (Bank)
    So if by keeping your account 'open' does this give the lender (Bank) the "right" to call the shots on the property. ?????

    Banned

    my mortgage currently stands at £50 left to pay. I've reduced payments now to £2 per month. I'm not sure how much the bank charges to look after your deeds, but I am pretty sure its more than £2.

    I own the house - all bar £50. Anything I do with it has nothing to do with the bank, except if I sold, I'd have to pay them £50 to clear that debt. You do not need to ask the bank permission to paint your house (or build an extension!) It is completely yours to do as you please.

    Butterbean;8698734

    I think part of the idea of it being best to owe something on a mortgage … I think part of the idea of it being best to owe something on a mortgage comes from the days of MIRAS - mortgage interest relief at source - which was a kind of tax break if you had a mortgage. But that went in 2000.





    The idea of owning a small amount on the mortgage was so you didn't have to pay someong to store the deeds of your house . e.g the bank etc

    If you keep the amount under say £100 as long as you keep paying the minimum payment it is all free storage. Just be careful that you don't let it go above the agreed amount or you could end up with a bad credit rating:?

    guv;8702607

    my mortgage currently stands at £50 left to pay. I've reduced payments … my mortgage currently stands at £50 left to pay. I've reduced payments now to £2 per month. I'm not sure how much the bank charges to look after your deeds, but I am pretty sure its more than £2.I own the house - all bar £50. Anything I do with it has nothing to do with the bank, except if I sold, I'd have to pay them £50 to clear that debt. You do not need to ask the bank permission to paint your house (or build an extension!) It is completely yours to do as you please.



    This was my belief as well, that you borrowed the money and although the property could be used if you start defaulting on payments so they can claim their money back, but otherwise it is yours to do with as you please (within the law, planning permission, etc).
    Otherwise there wouldn't be as much incentive for people to buy above rent, as then technically your lender would be your Landlord!

    Although this is the way it was prior to Law of Property Act 1925, where a legal mortgage was by a lease of legal charge, thus the lender would be the freehold owner still.:thumbsup:

    Pay it off, it is a nice feeling to know that you actually own your property.;-)

    Inactive;8703378

    Pay it off, it is a nice feeling to know that you actually own your … Pay it off, it is a nice feeling to know that you actually own your property.;-)



    You already own the house though, you own it from the moment the deeds are signed over to you. Just you owe your lender money, which they can use your house if you default on payment to get their money back as they have a interest which is registered on the charges register. :thumbsup:
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