I have repaid my mortgage!
Understanding Mortgage Discharge
For the vast majority of us, taking on a mortgage is our biggest financial transaction. Whether tens of thousands of pounds, hundreds of thousands or even for the lucky (?) few over a million, we borrow a vast sum of cash to help us buy a home. Over our adult lives, we may add to that, trade up, buy a bigger and better property with a bigger mortgage …. until the wonderful day comes that we can pay off the last instalment to the bank or building society.
When I started as a lawyer the standard deal was a capital and interest mortgage that meant paying back the month’s interest plus a tiny bit of the actual loan, all calculated to get the mortgage paid off after 25 years. Over the decades since then the market has become very varied and sophisticated, so there is a bewildering array of packages, methods and incentives to tempt us into borrowing a king’s ransom.
I could write a whole book on mortgages, but today we concentrate on that endgame – final repayment.
Once you bring the mortgage account to nil, there is still a security sitting on the title deed for your property. That was registered with your purchase in the Land Register (part of the Registers of Scotland) when you bought the house or flat. The title and security have a unique number assigned, and all the years down the line when the mortgage is redeemed, the security can be taken off, leaving your title clear and unencumbered.
I have been doing this long enough to remember the old-fashioned, cumbersome ways of discharging or removing a security, but let’s stick to the present day. There are still a couple of different paths to achieve a clear title.
One is digital discharge – some mortgage lenders are linked to the Land Register to allow your solicitor to do the whole job from a desktop without anyone needing to sign a paper document. You can find out in advance from our team if your mortgage qualifies.
If it doesn’t, then the procedure is slightly more long-winded. You should start by getting a letter or communication from the lender confirming you have finally settled the loan off. If your lender still has your deeds in paper form, they will either send them to you or ask you to nominate a solicitor to act for you - and send them to us. Once we receive the package – from you or from your lender - we check the title, draw up the discharge document, and send that to the lender to sign. That document is returned to us, we upload it to the Land Register electronically and apply for its registration – that takes place over a period of days or a few weeks, freeing your title permanently.
Again back in the day, all title and mortgage security documentation was in paper form. As electronic means of storage developed, many lenders either shredded the paperwork (a few use the word “dematerialised”), or returned it to the clients, while some continued to keep it in storage. Most lenders don’t keep paper copies of your deeds at all (mainly this is ok – all titles are now registered electronically in the master Land Register and are accessible remotely using either the unique title number, address and postcode or owner’s name). If no one can provide us with paper documents, we can still create the discharge from the information available, and arrange for the lender to sign it before we submit it for registration.
Once the discharge registration is complete, the Registers of Scotland send us an email with a link to download the updated clear title, we do so and email it to you. So you have a copy, we have one, and there is a copy in the Register itself – note that this is a public register so anyone can access it to see who owns what.
There is a moderate legal fee for the work we need to do, plus the Land Register charges £80 for ordinary discharge and £60 for digital discharge. It won’t cost you anything for an enquiry, so give us a call to talk to a solicitor about the details of your property and (repaid!) mortgage.