It can be seen as a cost-effective way of storing the deeds to the house, as the Building Society or bank will still hold them until you have repaid the mortgage. Otherwise, you would probably have to pay a bank to store them for you.
But it would depend upon the costs of servicing that small amount set against the costs of secure storage.
The only particularly good reason for not discharging the mortgage is if you want to use it for another secured loan from the same lender in the future. No real reason to leave any balance outstanding though.
It can be seen as a cost-effective way of storing the deeds to the house, as the Building Society or bank will still hold them until you have repaid the mortgage. Otherwise, you would probably have to pay a bank to store them for you.
But it would depend upon the costs of servicing that small amount set against the costs of secure storage.
For the vast majority of people there's nothing in their title deeds worth keeping in secure storage. Land registered titles are on computer, other paperwork (planning permissions etc) is handy to have but hardly disastrous to lose and copies are often easily obtained from other sources.
Many lenders don't even keep title deeds in the first place these days, as it isn't worth their while.
For the vast majority of people there's nothing in their title deeds worth keeping in secure storage. Land registered titles are on computer, other paperwork (planning permissions etc) is handy to have but hardly disastrous to lose and copies are often easily obtained from other sources.
Many lenders don't even keep title deeds in the first place these days, as it isn't worth their while.
If you have had a subsidence claim or other reasons that your buildings insurance may be higher, then keeping your mortgage running may be cheaper than paying it off and then having to obtain buildings insurance under the new terms. Towards the end of a mortgage, most of the payments you make are going straight to capital repayment (because the interest was front-loaded) so the benefit of paying the mortgage off can be quite small; a change in your insurance premiums could be enough to tip it over into being cheaper to wait for it to end anyway.
The "storage of deeds" argument is, as you say, fifty years out of date. Deeds don't matter any more.
getting the deeds kept secure by the building society is exactly what I had in mind, rather than keep them at home.
Leaving a grand outstanding means only paying a small amount a month for them to do this. I have no plans to go back to them for another loan....HIGHLY unlikely.
I've got 2 and a half weeks to decide how much to pay back and leave outstanding when the endownment finally matures. I will be able to pay the entire mortgage if I want to.
If you have had a subsidence claim or other reasons that your buildings insurance may be higher, then keeping your mortgage running may be cheaper than paying it off and then having to obtain buildings insurance under the new terms. Towards the end of a mortgage, most of the payments you make are going straight to capital repayment (because the interest was front-loaded) so the benefit of paying the mortgage off can be quite small; a change in your insurance premiums could be enough to tip it over into being cheaper to wait for it to end anyway.
The "storage of deeds" argument is, as you say, fifty years out of date. Deeds don't matter any more.
interesting. My mortgage is with the same company as the insurance company.
For the vast majority of people there's nothing in their title deeds worth keeping in secure storage. Land registered titles are on computer, other paperwork (planning permissions etc) is handy to have but hardly disastrous to lose and copies are often easily obtained from other sources.
Many lenders don't even keep title deeds in the first place these days, as it isn't worth their while.
The "storage of deeds" argument is, as you say, fifty years out of date. Deeds don't matter any more.
I would not be so sure about that - as this post from 2004 indicates:
I am not sure that documents for all properties are held electronically by the Land Registry. I seem to recall that the records only become electronic when the house is sold.
So if you have owned the same house for many years then there may be no electronic record yet.
Also I am not sure that the Land Registry actually holds the deeds electronically. I think it is only the title that is held electronically.
The deeds contain important information about covenants etc. so I guess you don't want to lose it!
The other thing to remember is that all deeds are now computerised at Land Registry.
This is simply not true! It was only during the 1990s that compulsory registration was introduced when properties were sold or mortgaged. Anyone who has been living in the same property for many years might be living in an unregistered property, and without what people call "The Deeds" could have difficulty in proving ownership. For more details see -
If you have had a subsidence claim or other reasons that your buildings insurance may be higher, then keeping your mortgage running may be cheaper than paying it off and then having to obtain buildings insurance under the new terms.
I may be missing something but why does having a mortgage or not affect the cost of buildings insurance?
It can be seen as a cost-effective way of storing the deeds to the house, as the Building Society or bank will still hold them until you have repaid the mortgage. Otherwise, you would probably have to pay a bank to store them for you.
But it would depend upon the costs of servicing that small amount set against the costs of secure storage.
As others have said deeds are irrelevant for most properties these days (unless they are old enough to be classed as an historical document or the house hasn't undergone transfer of ownership in several decades). Even in the latter case as soon as it gets sold the deeds will become electronic. The only reason really (and it's why I've done it) is because it keeps my mortgage open in case I have a sudden need for it. I've only got about £250 left and it's an offset mortgage so my current account nearly always means there's no interest to pay.
The second reason I do it is because since 'money is debt' I'm hoping it pisses the hell out of Barclays that I'm hugely in credit with them
There will be some exceptions, but the vast majority of properties are registered (probably even more so if they're mortgaged). People tend to overestimate the value of title deeds.
Besides, you might be safer to keep the deeds at home, as it's hardly unknown for the banks to lose them (or even have a whole warehouse of them go up in flames, as happened to Bradford & Bingley).
For the vast majority of people there's nothing in their title deeds worth keeping in secure storage. Land registered titles are on computer, other paperwork (planning permissions etc) is handy to have but hardly disastrous to lose and copies are often easily obtained from other sources.
Many lenders don't even keep title deeds in the first place these days, as it isn't worth their while.
The property may not be registered at Land Registry if it has not changed hands since 2000.
It was only in 2000 that every property transaction had to go to Land Registry, and fro examplr my property I bought in 1978, is not registered with them.
It can be seen as a cost-effective way of storing the deeds to the house, as the Building Society or bank will still hold them until you have repaid the mortgage. Otherwise, you would probably have to pay a bank to store them for you.
But it would depend upon the costs of servicing that small amount set against the costs of secure storage.
how do you work that out, we have a mortgage and the deeds are the drawer upstairs
I may be missing something but why does having a mortgage or not affect the cost of buildings insurance?
It was fairly common in the 1990s (and most people proposing to pay their mortgages out will have mortgages of that sort of age) for buildings insurance to be lumped in with the mortgage: rather than having to prove to the lender that you had buildings insurance, they sold it to you (and at a fairly reasonable rate) and added the monthly premium to your repayments. If you've had a subsidence claim as I have, you will have to start a new policy, with a new application, as the current policy dies with your mortgage. There's an agreement between insurance companies and the government that you can get cover, but it won't be cheap and it will have significantly higher excesses. Continuing the current policy may be cheaper than starting a new one, depending on how big your mortgage is and how friendly your insurance company are.
Ive just finished my mortgage and have been sent the deeds and land registry. Weve just put them in a fire proof/water proof document safe in the house!
OP, don't worry about this. When you have nearly paid up, the lender will write to you and suggest that you leave £50 outstanding for ever. You will not have to pay interest on it. You will of course continue with the same insurance (do not change insurer without a very good reason).
I have £125 outstanding on my mortgage, as I have for years. It was a common thing, something to do with deedstore and doesn't cost me a penny. Presumably, it also allows me to remortgage if necessary with this bank as a current customer (previously known as the Halifax).
is it a good idea to leave a small amount outstanding, say a grand ? And if so, why ?
It can be, if you have an offset mortgage. The capacity borrow easily at the same rate as your mortgage might be of great value to you and you lose that when you pay it off.
I suppose having a tiny mortgage bolsters your credit file? Not sure.
OP, don't worry about this. When you have nearly paid up, the lender will write to you and suggest that you leave £50 outstanding for ever. You will not have to pay interest on it. You will of course continue with the same insurance (do not change insurer without a very good reason).
My lender never suggested that. We finished our mortgage in January.
I have £125 outstanding on my mortgage, as I have for years. It was a common thing, something to do with deedstore and doesn't cost me a penny. Presumably, it also allows me to remortgage if necessary with this bank as a current customer (previously known as the Halifax).
When my savings amount passed my outstanding amount on my offset mortgage, Barclay (formally woolwich) set me a couple of letters suggesting that I move my excess savings to ISA as the offset mortgage doesn't pay much interest.
I have £125 outstanding on my mortgage, as I have for years. It was a common thing, something to do with deedstore and doesn't cost me a penny. ...............
Same here. It comes in very handy when I get a cold call from a company promising to reduce the interest rate on my mortgage! I can usually manage to keep a conversation going for at least ten minutes.
OP, don't worry about this. When you have nearly paid up, the lender will write to you and suggest that you leave £50 outstanding for ever. You will not have to pay interest on it. You will of course continue with the same insurance (do not change insurer without a very good reason).
Why can't you change insurer?
My home insurance is with another financial institution, it's not with my mortgage company. What am I missing?
I have left a small amount on mine as it as a 99yr interest only mortgage which has a drawdown facility, so I have access to an extra loan of 60% of the property value any time I want.
When we wanted to extend recently, we were able to get more funds on the same conditions as our existing £1 mortgage, so were able to borrow £375k at 0.5% above base rate, i.e. 1%!!, so borrowed this full amount and have reinvested £300k in relatively safe investments. Another couple of years and the returns on this £300k will pay off the extension.
As others say, the storage of the deeds is all irrelevant - the vast majority are stored electronically these days.
Theoretically, I need to tell my mortgage company who my buildings insurance is with, even for £1!
Comments
But it would depend upon the costs of servicing that small amount set against the costs of secure storage.
For the vast majority of people there's nothing in their title deeds worth keeping in secure storage. Land registered titles are on computer, other paperwork (planning permissions etc) is handy to have but hardly disastrous to lose and copies are often easily obtained from other sources.
Many lenders don't even keep title deeds in the first place these days, as it isn't worth their while.
If you have had a subsidence claim or other reasons that your buildings insurance may be higher, then keeping your mortgage running may be cheaper than paying it off and then having to obtain buildings insurance under the new terms. Towards the end of a mortgage, most of the payments you make are going straight to capital repayment (because the interest was front-loaded) so the benefit of paying the mortgage off can be quite small; a change in your insurance premiums could be enough to tip it over into being cheaper to wait for it to end anyway.
The "storage of deeds" argument is, as you say, fifty years out of date. Deeds don't matter any more.
Leaving a grand outstanding means only paying a small amount a month for them to do this. I have no plans to go back to them for another loan....HIGHLY unlikely.
I've got 2 and a half weeks to decide how much to pay back and leave outstanding when the endownment finally matures. I will be able to pay the entire mortgage if I want to.
interesting. My mortgage is with the same company as the insurance company.
I would not be so sure about that - as this post from 2004 indicates:
http://forums.moneysavingexpert.com/showpost.php?p=19046&postcount=4
and a following post in the same thread from 2008
http://forums.moneysavingexpert.com/showpost.php?p=8233471&postcount=50
The second reason I do it is because since 'money is debt' I'm hoping it pisses the hell out of Barclays that I'm hugely in credit with them
There will be some exceptions, but the vast majority of properties are registered (probably even more so if they're mortgaged). People tend to overestimate the value of title deeds.
Besides, you might be safer to keep the deeds at home, as it's hardly unknown for the banks to lose them (or even have a whole warehouse of them go up in flames, as happened to Bradford & Bingley).
The property may not be registered at Land Registry if it has not changed hands since 2000.
It was only in 2000 that every property transaction had to go to Land Registry, and fro examplr my property I bought in 1978, is not registered with them.
how do you work that out, we have a mortgage and the deeds are the drawer upstairs
It was fairly common in the 1990s (and most people proposing to pay their mortgages out will have mortgages of that sort of age) for buildings insurance to be lumped in with the mortgage: rather than having to prove to the lender that you had buildings insurance, they sold it to you (and at a fairly reasonable rate) and added the monthly premium to your repayments. If you've had a subsidence claim as I have, you will have to start a new policy, with a new application, as the current policy dies with your mortgage. There's an agreement between insurance companies and the government that you can get cover, but it won't be cheap and it will have significantly higher excesses. Continuing the current policy may be cheaper than starting a new one, depending on how big your mortgage is and how friendly your insurance company are.
It can be, if you have an offset mortgage. The capacity borrow easily at the same rate as your mortgage might be of great value to you and you lose that when you pay it off.
I suppose having a tiny mortgage bolsters your credit file? Not sure.
My lender never suggested that. We finished our mortgage in January.
Ditto
Same here. It comes in very handy when I get a cold call from a company promising to reduce the interest rate on my mortgage! I can usually manage to keep a conversation going for at least ten minutes.
Why can't you change insurer?
My home insurance is with another financial institution, it's not with my mortgage company. What am I missing?
When we wanted to extend recently, we were able to get more funds on the same conditions as our existing £1 mortgage, so were able to borrow £375k at 0.5% above base rate, i.e. 1%!!, so borrowed this full amount and have reinvested £300k in relatively safe investments. Another couple of years and the returns on this £300k will pay off the extension.
As others say, the storage of the deeds is all irrelevant - the vast majority are stored electronically these days.
Theoretically, I need to tell my mortgage company who my buildings insurance is with, even for £1!