The early 1990’s saw the start of a property boom in the UK.
The number of mortgage products increased, interest rates were favourable and the level of deposit buyers were required to provide began to decrease. Thousands of buyers took the opportunity to purchase their first home, move up the property ladder or invest in building a property portfolio.
25 years on and many of those buyers are now coming to the end of their mortgage agreements, but what formal steps do you need to take when your mortgage ends?
You will receive a letter from your mortgage provider confirming that you have at long last paid off your mortgage. Whilst it is a time to celebrate there are some practical steps that have to be undertaken once you have received this letter and we have put together some useful tips to help guide you through the process.
Your mortgage provider will have registered their loan to you as a charge against the title of your property. This charge should be removed from the title particularly if you intend to sell the property or transfer in the future. Although it is not essential that the security is discharged at the end of the loan, this is the best time to do it, before mortgage details go missing or are forgotten. Without those details it can be difficult and time consuming to procure a discharge later. Most people also like to know that after years of paying a mortgage their property is finally charge-free!
Discharge your mortgage - the process
This is a relatively straightforward process and you do not need to sign anything to complete the process. You should contact a solicitor - this does not need to be the same solicitor that bought your house.
Your solicitor will need a copy of the letter from your mortgage provider confirming that the mortgage has been in paid in full together with your mortgage account details (this is normally specified in the same letter). Your solicitor will also need to see the title deeds but if you are unsure where these may be stored then not to worry as your solicitor can assist with tracking them down.
Your mortgage provider will have to sign what is known as a Discharge document this may either be a paper document prepared by your solicitor or a digital document which is submitted to the mortgage provider online. The document is then submitted to the Land Register so the charge can be removed from your title which can take a few weeks to complete. Your solicitor will charge a fee for this service and, in addition a registration fee of £50/£60 (depending on whether the discharge is paper or digital) is payable to the Land Register.
Once the process is complete, we at Thorntons will send you the full Title Deed pack for your retention.
Check Your Buildings Insurance
You should double check that if your property is also insured by your mortgage provider that the insurance remains in place and has not been cancelled when you paid off the mortgage or when the security is discharged.
Write a Will and Power of Attorney
You home is usually your most valuable asset and it is worth considering making a Will if you do not already have one, or consider reviewing your current Will to make sure that it is up to date. You might also, at the same time, consider putting in place a Power of Attorney so that you and your family have the peace of mind of knowing that your affairs can be properly managed on your behalf during your lifetime should that prove necessary or desirable.
Now that you have paid off your mortgage you may find that you now have surplus cash each month. You may wish to consider how to best invest that money to obtain the best returns for your personal circumstances. We can put you in touch with advisers who can provide independent financial advice.
At Thorntons we are a full service firm and have a team on hand to assist you through these practical steps and answer any further questions. Please contact our Residential Property team on 03330 430150.