UKC

Ok, end of mortgage is fast approach, wondering about a few things:

Title Deeds to house - are these all electronic now, or do I physically get some paperwork that I need to keep?

I have a mortgage bank account - presume this comes to an end and I need to start a new bank account, transfer all my direct debits and money in etc to the new account?

Home owners insurance - do I need this if no mortgage - what are the risks?

Anything else I need to consider / worry about?

One risk is no money and nowhere to live if it burns down. 

It may depend on where you live and when the property last changed hands but if it's on the Land Registry there may not be any physical document to be ceremonially handed over from the building society.  I had visions of a scroll with a ribbon, but what actually happened was I applied to the Land Registry for a copy of the entry for the property showing that we held the freehold and there was no charge being held by any lender.

I found the Land Registry website fairly opaque and from what I recall it isn't at all clear which document you need (and you can't read it until you've paid for it and they've sent you the hard copy).  Classic example of a hybrid 18th/21st century system where in principle you can apply online but have to wait for them to post you a piece of paper.

At least you can now pay online.  Until very recently you had to send them a Postal Order.  Younger readers will need to google that. 

I think you are referring to an insurance against you being unable to pay the mortgage for such reasons as redundancy or death. If you've paid it you won't need it. especially if the payout is purely for mortgage repayments.

However you do still need Buildings insurance, which pays out if the house is damaged or falls down.

No idea about your bank account, but there are 2 very important things to consider.

1 - yes, you need house insurance, for the same reason you (should) have contents insurance. Check FredT's answer on this.

2 - from my own dealings with the Land Registry, I would definitely make sure you get a copy of the deeds, to make sure that firstly they have them registered in your name and secondly that they are correct. You'll need them when you come to sell.

When we sold our last house, the LR had lost the paperwork and we couldn't therefore prove ownership, so ended up having to take out indemnity insurance to cover any counter claims.

I am currently chasing the LR to make sure their details are correct for our current property, as when I downloaded some site plans for a planning application, that appeared to show that next door own half of our driveway!

We are soon to be in the same position. Saved up a lump sum to pay it off 😃

You spend a great deal of time trying to wipe the smile off your face 

Al

I didn’t know we had to do this regarding the freehold. I’ll look into it.

depending where you live you may have to engage a solicitor to arrange to have the standard security discharged once the bank is happy you don't owe them any money.

This is for scotland...   https://www.ros.gov.uk/services/discharge-a-mortgage-deed

and I think this covers england...  https://www.gov.uk/government/publications/remove-a-paid-off-mortgage-regis... 

Just a suggestion, but you have spent the last few decades(?) paying off your debt, so you are in the habit and swing of paying monthly, so unless there is a pressing reason not to, why not continue the discipline? But this time you switch it (or a proportion of it)  into a savings scheme which yours! It's a great opportunity to increase your savings towards future expenditure which brings tangible benefits to you and your family. 

For example, in my case I carried on paying a proportion of what I had been paying into a 5 year contract for an annuity which noticeably boosted my pension. Never regretted it.

Yes. now is not the time to relax. Its time to either load up your pension or invest in a bigger house. I believe having a mortgage is good for your credit check score too. evidence of regular payments no-matter how small will give you access to low rate finance in the future. Why pay the mortgage off anyway when putting the money into pension will immediately save 5% tax.. Depends on your age of course but if you expect to be around and still enjoying life at 55 put the money into pension, government gives you 20% on top and take it all out when you are 55 at as part of your lump sum at 0% tax. Then pay off your mortgage. Does also mean that you don't have to look after the registry documents. Leave that up to the mortgage company. 

Not sure about your financial advice there, I'd consult someone qualified before making financial decisions.

Aside from this, you don't have to worry about documents as they are all held on by the land registry. I was given my deeds in a large brown envelope "for historical interest" as the solicitor put it. Yes, I do keep them relatively secure as they are indeed historically interesting but if they went up in smoke it wouldn't cause me any legal issues.

To the OP. I'd make sure you have at least buildings insurance, it's not just there to pay for your property in case of the worst, it will also pay for any damage to surrounding buildings and infrastructure so very important if you have any attached houses. Also, it's pretty cheap if you look around.

If you were however referring to payment protection insurance for the mortgage, I'd have a good look at the terms and conditions of this policy, many of these policies had such ridiculous terms and were miss-sold to people who had no chance of ever claiming on them. These people have very legitimately claimed large sums in compensation from the mortgage providers,

I recall that the Land Registry keeps the docs/record and removes the charge on the property that the lender had.

One thing to watch, depending on how you're paying it off, is that we had some old endowments - way under forecast value (and with the delta taken care of), but still an appreciable value that was calculated to take care of the final payment.  What we had not taken into account was the delay in transferring the money to us, plus the administrative incompetence of the firm involved (one of these feckless organisations, ReAssure, that buys books of policies from the original provider). Paying the due amount on the final day was more fraught than it should have been and involved a barrage of complaints to the provider.  I found it infuriating that a financial institution should be so quick to jump on your case if you're late with a payment, but so disinterested if they're late.  We had built in a little tolerance for transfers etc, but not quite enough, especially when they don't count days the same as the rest of the world, or seem to care much.  They paid out, but only after the threats of escalation had reached the full nuclear and chemical warfare stage. It involved a conversation with them on the day the money was due (and had been paid by us out of a different pot). I asked how I was supposed to pay a '£big number' with the money still in their account, some time after it was due in mine.  They said they understood my position.  Good, I said, so where do I get it from?  In the end, someone pressed the right buttons on a computer and then tried to pass it off as good service.  That followed days of calls, including the day before when their systems were down and they couldn't tell me anything at all - nothing.

The litany of excuses was absolutely pathetic (including Covid a year into the pandemic).   If you have an idle moment, google ReAssure - we got off lightly.... 

You should still insure the house, but you are not obliged to...

Nothing to add apart from "congratulations" and "i'm slightly jealous".

Overpaying ours like mad.  Current end date in sight, all being well, is March 2025. I plan to deliver the very last payment naked, clenched between my bum cheeks to the nearest branch of my mortgage provider.

I took great delight in overpaying like mad and then stopping just short of paying it off. I then requested that the bank readjust the payments back to the contracted mortgage term.

I felt that the administration costs to them of me playing 40 pence a month for the rest of the life of the mortgage had to be more than I was paying in interest.

As someone already said, it's important to have a mortgage to keep your credit score up. I had problems getting my last phone contract because I had no mortgage and no credit card debt, so my credit score was up in the good category but I didn't make excellent because I wasn't carrying enough debt (personal loans don't seem to give you much of a boost). You might be able to keep it up by paying for everything on a credit card instead of a debit card but still paying off in full each month but I don't know, the way these scores are calculated is shrouded in secrecy.

Don't underestimate how important your credit score is, it's used for a lot more decisions than the granting of more credit.

Now some people might argue that this is ****ing ****ing ***ing stupid.

Mainly because it is.

That's kind of weird as I had no problem getting a fairly weighty mortgage on my own a few years ago, despite not having any loans in the past 10 years and no mortgage ever. I just had the standard bills and 1 credit card that I pay off every month. I didn't notice any other issues with my credit history in my day to day life either.

The mortgage is a secured debt. That's why it's easy to get. A mobile phone contract is unsecured.

I checked with my current provider that there were no penalties for early repayment (there was a limit of 10% overpayment of the outstanding balance per year with my original provider), but with my current provider I'm free to pay off as much as I chose.

The only stipulation is that I don't pay off the balance in full before the end of the term (2029 I think). So I think I'm going to be in a situation like you are - my 'mortgage free' calculation date of May 2025 is actually going to be 'a mortgage of a couple of hundred quid' by May 2025 at which point they will reduce the monthly payments to  a tiny amount.

That's good enough for me.

lol gud1. Young readers can't afford houses!

Never had a problem getting a mobile phone contract although I don’t normally bother as it’s more economical to buy outright. Unsecured loans were never a problem either although I haven’t taken one out since my 20’s

Your Mrs bullying you into remortgaging to put up an unnecessary extension, so you can spend 3 months being kept awake prior to night shifts and on your non work days gaze out the window to angrily contemplate builders you're paying through the nose, stand round chatting and drinking tea.

Work commencing in 2 weeks.

FML

I'd recommend signing up for this https://propertyalert.landregistry.gov.uk/

Not particularly because of your situation, just because it's a good idea.

I think that's BS, I'm afraid.  We've been mortgage-free for nigh on seven years and my credit score* has been just fine: MSE keeps telling me so, and I've had zero problem applying for interest-free balance transfer credit cards and such like in that time.

* Bearing in mind that there isn't really such a thing anyway: https://blog.moneysavingexpert.com/2021/06/martin-lewis-credit-score-myths/

I have been mortgage free twice and never had any problem with credit. I do generally keep something ticking over on interest free though just for the sake of keeping my credit up. 

Bless, you actually think there will still be physical branches of banks in 2025.

It was very disappointing clearing ours off,  just a couple of mouse clicks and 50k vanished from our savings account and the mortgage account showed zero. 

They do, however you need to apply to have the charge removed from the title. It's probably simple enough to do yourself if you download the right forms and get the relevant documentation from the mortgage company. Probably less hassle to get a solicitor to do the work. 

I have something like £25 outstanding on the mortgage.  Below £125 with my provider the interest rate is zero.  They send me a summary of zero payments each year.

Good point.  Maybe I'll just do it next to a cashpoint.

Been doing something similar with our savings too but in smaller chunks, as long term fixed ISA's mature and there's not been anywhere decent to transfer the cash too.  Now we're down to what we consider a safe limit of savings (don't want to get it any lower) and just chucking what we can at overpayments.

I must have a been a satisfying kind of disappointment surely?  Knowing you're free of the bank's clutches, etc

Yes it was satisfying but anti climatic as well if you get my drift.

You expect more from the biggest financial event of your life. 

The traditional reason to do this was because they keep your deeds safe for free indefinitely if you do.  Now deeds are not of any importance in terms of defining ownership, I don't really see any point in this.

Watch this space in three years time. I'll let you know if I feel the same 😂

Depends on the mortgage. I've run mine down to about £50, but the terms mean I can draw additional funds from the mortgage account, no questions asked. It doesn't cost me anything to keep the account open, but if I suddenly need a few thousand for a new hip or something I don't have to dip into savings.

It maintains the charge on your house and prevents anybody securing debt against it without additional hurdles.