Paying off mortgage
Mon, 18/02/2008 - 15:37
It's hard to say given you don't mention how much money is at stake here. If you can afford to pay off your mortgage and have some money left for a rainy day then I'd say that's a good idea. However if paying off your mortgage means using up all your savings then clearing the mortgage wouldn't be such a wise move.
Hope that helps.
Tue, 19/02/2008 - 08:41
I know Nationwide Building Society offers a similar thing. You are able to leave a small balance (it was £1.00) interest free, if you insure through them this would continue and they would also hold your deeds securely for you.
I think the only real benefit is having your deed stored for free in effect. I understand that many solictors and banks make an annual charge for this.
The decision is can you save more by paying the mortgage off that you can earn in a savings account with the same money? example:
£10000 Mortgage 6% interest = annual interest charge of £600 interest per year.
£10000 Invested 6.55% (a no notice savings account with the West Bromwich BS) gives £655 annual interest gross, less tax (22%)= £510.90
Wed, 20/02/2008 - 10:06
ddtowe makes an excellent point with the comparison of mortgage and savings interest rates. Deed storage is the main reason why people leave an amount outstanding.
At the risk of moneywise creating a Pedants corner to stick me in, I must point out that the basic rate of tax on bank interest is 20%. Sorry.
Matt Pitcher is a wealth adviser at Towry Law Group and a Moneywise Ask The Professionals columnist
Wed, 20/02/2008 - 17:36
Halifax have a similar scheme where you leave £125 owed on your mortgage and as long as it does not go over this figure you pay no interest. I contacted them in January as I thought their home insurance was too high and was going with another insurer. They advised me I could do this and didn't have to pay off the £125. They also advised me that you no longer needed hard copies of your house deeds in England as the Land Registry now keeps them on a computer file. They also advised that by keeping my mortgage account open it would be easier for me to borrow money from them in the future if needed for a car or extension. As I am not being charged anything I am keeping the mortgage account open.
Tue, 26/02/2008 - 17:51
does anyone know, my father in law died recently and my wife is currently clearning out his house. she can't find any sign of the mortgage deeds that prove he owned the house outright, and its not wit h the lender... what does this mean for his will (don't think anyone will contest) and is it possible to get copies of the deeds?
Thanks
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My mum and stepfather have recently remortgaged. They have a relatively small amount outstanding but have been told by their lender that it is better not to pay off the amount fully and just leave a small amount outstanding. My In- Laws have done the same and their title deeds remain with the lender. Neither my parents or in- laws could tell me why they were advised in this way. Could anyone help? Thanks