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pay off mortgage completely or leave a little bit?
ladyloulou
Posts: 7,932 Forum Member
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We have a repayment mortgage of approx £35,000 with 15 years to go on, monthly payment of approx £250. We are in a postition we can now pay it off completely. Are we best to do that or should we leave say £1000 in? I have had confusing advice ie: if we pay it off we need a solicitor? What happens with the deeds? any advice gratefully recieved.
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You don't need a solicitor. I'm unsure as to why you'd leave any in? Each monthly payment you make includes a stack of interest - the sooner you pay off, the better!
Best thing we did.:)
It did take a few hours of messing about, but the deed was done.
All the documents landed on my doorstep a week later. The Land Registry keeps a record of it all, so the deeds are not that important.
Not sure were the Op is, but you do need a solicitor in Scotland to release the deeds.
Indeed. Good point.
I kept it partly so they kept the deeds and partly in the hope of qualifying for a payout if they privatised (they didn't
Whoever told you this is clueless.
Santander don't own your property - they simply have a legal charge registered against it to secure the loan that they made to you.
All that is required is for them to inform the Land Registry that they have discharged (released ) their charge (mortgage) over the property. There will probably be a redemption fee which you will have to to pay to Santander for them to deal with the discharge.
i certainly needed a solicitor to transfer my ex-house to my ex-wife..
i wasent bothered though, it was re-mortgaged to death
not my problem anymore....
anyway, op, all you need to do is contact your lender, as yosemite said, be sure you dont need additional funding before you clear the debt
We left just £1 on our mortgage a few years back when we otherwise paid the lot off. We simply waited until we were out of the period where we had to pay a fee for overpayment above a certain amount, and walked into the branch and handed over a cheque there and then. No solicitors or nothing.
We left £1 on the mortgage for the simple reason that if we ever needed money again, we could simply "borrow back" (or draw down) against our house, and also critically be on the same Ts and Cs of our existing mortgage which are a lot better than new mortgages today (1.5% on top of BoE base rate + £20 fee for the life of the mortgage takes some beating)
We have recently extended and rather than spend our investments, were able to borrow back £50k at just 2% - this has meant I have left my ISAs in place as they get a better rate than this.
Importantly, check to see what fees you incur for massively overpaying or paying off early - some of these can be high especially if you are in a fixed term period. Also being mortgage free can make you less creditworthy - our gas supplier wanted to put us on a pre-payment meter as they assumed we were renting as we were not making mortgage payments!
It also depends what rate of return on your investments you are getting with the funds you are paying the mortgage off with - if they are greater than the rate you pay on the mortgage, is there any benefit in paying it off now?