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13th May 2019

Should we pay off our mortgage in full?

There have been a lot of debates on this over the years, and the main reason for keeping a small amount on your mortgage was that the lender would carry on holding the mortgaged property’s title deeds safe.

The other benefit was so the borrowers would avoid paying an administration fee to the lender for the return of the title deeds when the mortgage was paid off. This fee is called redemption administration fee, deeds fee or and exit fee and cost between £50 to £300.

The truth is that due to a high percentage 80% of properties being registered with the Land Registry it is unnecessary to need the physical title deeds as its held in digital form for properties in England and Wales.

You can check here, if your house is registered with the Land Registry and if so you don’t need to have hard copies of the title deeds to prove you’re the owner of the property. So it’s safe to repay the whole of your mortgage and have your title deeds returned to you (assuming that your lender actually has them).

However, if you owned your house pre 90’s and haven’t mortgaged since you could be unregistered and therefor should keep the title deeds in a safe location. And you’ll need them if you choose to register your house voluntarily.

Registration of property in England and Wales is compulsory when you buy, inherit, are given, or take a mortgage out on a property. Land registration is dealt with by the Registers of Scotland in Scotland and by Land and Property Services in Northern Ireland.

 

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