Paying off Mortgage

Disadvantages:

You need to look after the deeds. You may have to pay a redemption fee. If your mortgage is with a building society you may lose out on conversion benefits (although conversions are getting very unlikely now). If you need a loan in the future it won't be as quick or easy to get a low rate secured loan as if you had a mortgage.

Advantages:

Nobody's permission required to switch your buildings insurance, or rent the property, etc. You have the deeds which may make selling quicker.

What many people do is leave 100 or so outstanding on the mortgage, so you get the deeds looked after free and any future loan you may need is quick and easy (especially if it's a flexible mortgage). If you then get hassle about buildings insurance or anything, just pay it off!

I think it's being moved to a "paperless" system now, with the "deeds" being stored in a downloadable PDF format at the land registry.

Aren't title deeds a thing of the past? Surely the Land Registry is all electronic now?

In message , BeeJay

does anyone really do this? I can't see any building society being interested in this arrangement.

I have several clients who keep the minimum loan balance on their "cheque book" mortgage accounts to enable them to have swift access to large sums should the need arise.

What does a redemption fee actually cover?

I'm with Abbey and theirs is over 200 - I have heard that some of whatever it covers can be done oneself - but what?

What are the implications of refusing to pay it yet paying off the mortgage?

chas

Yes loads

If the mortgage isn't redeemed, you can't sell the house, or remortgage it except with the same lender.

Some lenders will not allow you pay the loan off completely unless you also redeem the mortgage. Look it up in the Ts&Cs under "minimum loan balance".