Mortgage advice

IvanDobskey · 13 Mar 2018 at 13:58

I'm very close to paying off the mortgage on my first property and I am unsure of the process. I have been making overpayments with the online app for a few years now.

I'm guessing the final payment will have to be made in person and some paperwork completed?

It's only a little two bed semi and the plan is to sell it and buy something a little bigger with my girlfriend in the next couple of years.

chroniclard · 13 Mar 2018 at 14:15

Ask the bank?

IvanDobskey · 13 Mar 2018 at 14:19

I'll have to book an appointment with them a bit nearer the time I guess.

IvanDobskey · 13 Mar 2018 at 14:19

Ignore

gort · 13 Mar 2018 at 15:46

When I finished mine, it was done automatically. I cancelled the standing order for the overpayment on the last month and then the bank took out the final payment of what ever it came to.
So say my payments were £600pm and the last month it had a balance of £300 they just took that out and closed the account.
No need to visit a bank and you will get the final mortgage statement confirming that the mortgage balance is zero.

ants83 · 13 Mar 2018 at 15:50

IvanDobskey · 13 Mar 2018 at 16:11

gort said:
When I finished mine, it was done automatically. I cancelled the standing order for the overpayment on the last month and then the bank took out the final payment of what ever it came to.
So say my payments were £600pm and the last month it had a balance of £300 they just took that out and closed the account.
No need to visit a bank and you will get the final mortgage statement confirming that the mortgage balance is zero.

Mine actually has another 12 years to run though. It's on a standard tracker and I can just make whatever overpayments I want when I have the money spare. I have 5k to pay off and my monthly payments are down to £40. I'm wondering if I can just pay up the remainder using the app.

Pocah · 14 Mar 2018 at 07:57

For mine, I phoned them up to say I was paying it off, the mortgage company prepared a final statement, which included a sum for the last payment and a date by which it had to be made. They sent me that in the post. You cancel your standard payments, then send them a cheque for the last payment or perhaps allow them to just take the money by DD. Simple as that. There are no documents, nothing. They just send you through a letter at the end saying your commitments are done and you now own the house. No need to sign anything. The house registration does not change. There is no need for transfer of deeds and such, the deeds these days are irrelevant.

By the way ~ WELL DONE! It's an amazing thing not to be tied to mortgage payments.

Syla5 · 14 Mar 2018 at 10:04

IvanDobskey said:
Mine actually has another 12 years to run though. It's on a standard tracker and I can just make whatever overpayments I want when I have the money spare. I have 5k to pay off and my monthly payments are down to £40. I'm wondering if I can just pay up the remainder using the app.

If you are ending a specific rate term my advice would be to arrange a new mortgage product with a better rate. Standard Variable rates are very expensive. Phone your current provider for initial advice.

IvanDobskey · 14 Mar 2018 at 10:20

Pocah said:
For mine, I phoned them up to say I was paying it off, the mortgage company prepared a final statement, which included a sum for the last payment and a date by which it had to be made. They sent me that in the post. You cancel your standard payments, then send them a cheque for the last payment or perhaps allow them to just take the money by DD. Simple as that. There are no documents, nothing. They just send you through a letter at the end saying your commitments are done and you now own the house. No need to sign anything. The house registration does not change. There is no need for transfer of deeds and such, the deeds these days are irrelevant.

By the way ~ WELL DONE! It's an amazing thing not to be tied to mortgage payments.

Thanks for the advice

Hoping to have it paid off by august.

It's only a small two bed semi and I'll most likely have another mortgage in a year or two when me and my girlfriend buy a bigger place between us.

But it will feel good to own it outright

D.P. · 14 Mar 2018 at 10:52

Pocah said:
For mine, I phoned them up to say I was paying it off, the mortgage company prepared a final statement, which included a sum for the last payment and a date by which it had to be made. They sent me that in the post. You cancel your standard payments, then send them a cheque for the last payment or perhaps allow them to just take the money by DD. Simple as that. There are no documents, nothing. They just send you through a letter at the end saying your commitments are done and you now own the house. No need to sign anything. The house registration does not change. There is no need for transfer of deeds and such, the deeds these days are irrelevant.

By the way ~ WELL DONE! It's an amazing thing not to be tied to mortgage payments.

This. you need to arrange a final payment and they we calculate a statement with the final interest and any charges due, with a date it has to be paid by.

IvanDobskey · 14 Mar 2018 at 12:32

D.P. said:
This. you need to arrange a final payment and they we calculate a statement with the final interest and any charges due, with a date it has to be paid by.

Ok, good to know.

What about deeds? Are they no longer a thing? Done electronically now?

pigeonguyuk · 14 Mar 2018 at 14:31

IvanDobskey said:
Thanks for the advice

Hoping to have it paid off by august.

It's only a small two bed semi and I'll most likely have another mortgage in a year or two when me and my girlfriend buy a bigger place between us.

But it will feel good to own it outright

Once paid up don't see it. Use it as a long term investment and rent it out. The rent is a 2nd income source and will aid you in a 2nd mortgage. Also as you have used the word "girlfriend" instead of "fiancé or wife" then if something does go wrong in future you still have a roof over your head without having a mortgage to pay.

Obviously if there's another property boom in the future and you can sell up and make a good lump sum profit.

touch · 14 Mar 2018 at 14:48

pigeonguyuk said:
Once paid up don't see it. Use it as a long term investment and rent it out. The rent is a 2nd income source and will aid you in a 2nd mortgage.

Presumably he won't have been saving up another deposit whilst paying off his first mortgage so it may well work out better for him to sell and use the money as a deposit on the new house rather than renting it out.

IvanDobskey · 14 Mar 2018 at 15:11

Thanks for all the comments guys, always good to get people's opinions.

I would love to keep the house and rent it out, but I'll need the money towards the new house as we want something bigger and better than my little two bed semi.

pigeonguyuk · 14 Mar 2018 at 17:16

IvanDobskey said:
Thanks for all the comments guys, always good to get people's opinions.

I would love to keep the house and rent it out, but I'll need the money towards the new house as we want something bigger and better than my little two bed semi.

Obviously we don't know how much your house is worth at present.

However. if you were accepted on you own and had a mortgage of 100K, then applying for a joint mortgage with your girlfriends wage also considered meaning a higher mortgage available. Then add in the rental income of the new property increases it even further. You could also put the existing house up as equity against the 2nd mortgage.

IvanDobskey · 14 Mar 2018 at 18:23

pigeonguyuk said:
Obviously we don't know how much your house is worth at present.

However. if you were accepted on you own and had a mortgage of 100K, then applying for a joint mortgage with your girlfriends wage also considered meaning a higher mortgage available. Then add in the rental income of the new property increases it even further. You could also put the existing house up as equity against the 2nd mortgage.

House is worth about 140k and we want to buy something for about 200k.

Pocah · 15 Mar 2018 at 09:37

IvanDobskey said:
Ok, good to know.

What about deeds? Are they no longer a thing? Done electronically now?

You are right! Everything is done electronically now so the deeds are just a piece of interesting history. There is often paperwork with them that will include details of any modifications made to the house so future buyers may want to see them, but other than that they are worthless. Up to you whether you pay the mortgage company to keep them or you keep them yourself.

mrbazmondo · 15 Mar 2018 at 10:15

I paid mine of early on my first house. All you have to do is make sure you cancel any standing order you may have set up to pay the mortgage. Direct debits will stop on their own.
The only thing really to think about is if your over payments are built up in a way in which you can draw them back. If you have a good mortgage deal you might then be able to move it to the new house with less cost than setting up a new mortgage.

edscdk · 15 Mar 2018 at 10:26

you just need to transfer £1500 to 40456523 21-06-87 and you are done