Is it better to keep a mortgage

[Kazz]

Any opinions on if it is better to keep a mortgage all be it a small one? than pay it off?

I was planning on paying my mortgage off but have been told by a couple of people recently its better to keep a small mortgage....truth or falacy?

[Mags]

My daughter and her husband paid off the balance of their mortgage last year with 8 years still to go.

This link may help, Kazz.....

http://www.thisismoney.co.uk/help-and-advice/advice-banks/article.html?in_advicepage_id=115&in_article_id=395995&in_page_id=90

[Jac]

I really cant see the logic in that Kazz unless it's for the loan records. If you gofor a loan and there's no record of debt, ie mortgage then they cant score you. If you have no credit score you wont get a loan.

[Kazz]

Ta all Mags will look at the link Ta, there again the mortgage is so small I may just leave it be for a couple of years.

[dandysmom]

Depends on your tax laws. Here we can deduct mortgage payments if we itemize rather than take the standard deduction. My mortgage was paid off in 1985 and I was so happy to be rid of it!!! The peace of mind knowing you own the house free and clear was worth more to me than the deduction; plus you can invest the money you were paying....just my opinion .....

[charliebubs]

I can't think of any reason why it would be better to keep it :?

If I had the money I would pay mine off in a second.

Perhaps if you don't want to pay yours off Kazz, you could pay some of mine off!!!!!! :? ;)

[Jane]

My mum was telling me about this the other day, she was saying if you pay it off early you get a load of extra charges because of all the profit the company will be loosing or something. That's what she told me anyway, but she is a weirdo sometimes :P

[Kazz]

Don't have the money to pay it off all at once but considering remortgaging at a fixed rate and reducing it to 5 years ;)

[charliebubs]

My mum was telling me about this the other day, she was saying if you pay it off early you get a load of extra charges because of all the profit the company will be loosing or something. That's what she told me anyway, but she is a weirdo sometimes :P

That is true to an extent!! If you pay your mortgage off during any fixed term that you agreed, then you would have to pay a redemption penalty which is usually about 3% of what you borrowed. This only usually applies for the first 2-5 years of the mortgage though, whilst you are in the fixed term period.

After that the bank can only charge you an admin fee for redemption, which is about £200. :)

[dandysmom]

Don't have the money to pay it off all at once but considering remortgaging at a fixed rate and reducing it to 5 years ;)
Once again, I'm not familiar with the laws there; but here you can add an additional amount (say $100.00) every month to the regular payment and mark it clearly for principal only; that can reduce the term by years!

[Kazz]

Its not a major issue. Thanks all.

[dinahsmum]

Here's a pretty good link on this subject http://www.moneysavingexpert.com/mortgages/mortgages-vs-savings
The only possible advantage I can see in keeping a (very small) mortgage debt, is that the mortgage co/bank will take care of your house deeds. However, your solicitor will probably not charge/charge very little for keeping them in his safe.

[charliebubs]

Here's a pretty good link on this subject http://www.moneysavingexpert.com/mortgages/mortgages-vs-savings
The only possible advantage I can see in keeping a (very small) mortgage debt, is that the mortgage co/bank will take care of your house deeds. However, your solicitor will probably not charge/charge very little for keeping them in his safe.

Title deeds are all electronic now anyway and stored at the Land Registry electronically - so the paper copies are pretty much null and void.

About 99% of all mortgage lenders are no longer retaining title deeds, as the paper copies have no value. It's becoming commonplace for us, as the borrowers, to retain the paper copies.

You will probably find that if you remortgage your new lender won't keep the title deeds, Kazz.