Who has paid off their mortgage?

ROE · 16 August 2011

is there anyone here have paid off their mortgage and what happen to the title
and what is the normal proceeding?

I been leaving my loan account open for a while with little debt left on it
is there any advantages and disadvantages closing it?

I like the feeling of closing up stuff I no longer use
and consolidate into fewer accounts

tech/a · 16 August 2011

You get the title.
Then if you want to raise capital against it then it will go to the lending institution.

One thing I did as quickly as I could is get out of cross collateralization.
I had each property stand on its own two feet so that when I freehold I can do so without being concerned about gearing of the portfolio.

I have lines of credit open on all properties including home.
I rarely use the home for funds.
This sort of flexability means I can buy at Auction or make rediculous offers at anytime knowing what my capital availability is at any one time.

If ofcourse your not developing or buying larger items then just close out the account and throw a party everytime there is an interest rate rise.

pixel · 16 August 2011

ROE said:
is there anyone here have paid off their mortgage and what happen to the title
and what is the normal proceeding?

I been leaving my loan account open for a while with little debt left on it
is there any advantages and disadvantages closing it?

I like the feeling of closing up stuff I no longer use
and consolidate into fewer accounts

It's a long time since I had a mortgage. In the early 1980's it was, and I only took it because it was subsidised by the company I worked for. I got higher interest on the money market than I had to pay for the mortgage.

When I changed employers, I wrote a cheque for the total amount owed and received the papers in return.

As I said, that was 25 years ago, so things may have become a tad more complicated since then; but the same principles should still apply.

As to closing out anything no longer required - especially if it's to do with debt and charges - I agree 100% that it's the smart thing to do. The Bank won't treat you any better if you hold on to an old account. They don't even give a toss, for how long you've been their customer - be it 30 years, 30 months, or 3 weeks.

nomore4s · 16 August 2011

What are you mob doing?

Don't you know its better to rent:

Good work Roe, probably best to just pay it out and not have to worry about it anymore, wouldn't be to difficult to open a line of credit against the property if required later on.

tech/a · 16 August 2011

They don't even give a toss, for how long you've been their customer - be it 30 years, 30 months, or 3 weeks.

How true that is!

I remember back in the 80s myself when the NAB was throwing money at me ---I of course took it----then things got hard---so hard that this young snapper couldn't fund the interest bill---so all of a sudden I was treated as a leper.

Terribly concerned--and I had good cause--my solicitor calmed me down.

Ill never forget his words.
"If you owe banks enough to hurt their books then --THEY have the problem of your debt---not you."

Fortunately they talked and negotiation saved bankruptcy.
But had it been a single mortgage Im sure I would have been toast.

Never forget

They don't even give a toss, for how long you've been their customer - be it 30 years, 30 months, or 3 weeks.

McLovin · 16 August 2011

tech/a said:
Ill never forget his words.
"If you owe banks enough to hurt their books then --THEY have the problem of your debt---not you."

My grandfather used to always tell me, "if you owe the bank a million it's your problem, if you owe the bank a hundred million it's their's".

Bill M · 16 August 2011

ROE said:
is there anyone here have paid off their mortgage and what happen to the title
and what is the normal proceeding?

I got all the mortgage discharge papers and went down to the Land and Titles office in downtown Sydney and got a print out of my title showing mine and my wifes name on it. It was a very good feeling.

I been leaving my loan account open for a while with little debt left on it
is there any advantages and disadvantages closing it?

I like the feeling of closing up stuff I no longer use
and consolidate into fewer accounts

I didn't see any benefit in leaving the account open, I just wanted to be rid of the mortgage. Apart from the competitive online accounts I've closed up all of the accounts I don't use anymore, cheers.

ROE · 16 August 2011

cool, look like getting rid of it is the way to go..

Thank you all

another quick one what about, for some crazy reason after I got hold of the title and some years down the track I misplace it?

is there any record some where that prove I own the place?
and can another copy be obtained?

Happy · 16 August 2011

If you care to do the maths in Australia it doesn’t pay to keep loan open for any longer that can be paid off.

Interest on loan is higher than interest on savings, not to mention that if you earn above threshold you have to pay tax on earned interest (but not on saved one).

However, recently I heard (Jenman on TV) if you have no mortgage on property or no property tittle insurance, it is easy to steal it from you while you are overseas or simply not at home.

Supposedly it will be worked on and loophole be closed, but for the time being it is the case.

EDIT:

…
is there any record some where that prove I own the place?
and can another copy be obtained?

And this is the problem that title can be re-issued and not necessarily identity of person asking for copy is checked.

Again not checked during sale of property.

skc · 16 August 2011

Surely we've moved past the age where the physical piece of paper called the title deed is the only proof whether you own the property or not.

I must say I had no idea where the title deeds were for my home and investment property until last year when I applied for a LOC on them. It turned out they were held by the solicitor who executed the purchase some years ago...

bellenuit · 16 August 2011

ROE said:
I been leaving my loan account open for a while with little debt left on it
is there any advantages and disadvantages closing it?

If you have a redraw facility on it and know you will have a need to take out a loan in the future, perhaps pay down to $100 and leave it open. You can then access funds through your redraw facility without having to open a new loan with all the opening expenses. You will presumably have a better rate than alternative loans.

If you currently have other more expensive loans open, then you could possibly use the redraw facility to pay those off and have the benefit of a lower interest rate.

For a long time I used my home loan to purchase shares and just ensured that I kept good records to show what portion of the loan balance applied to the shares (interest on which is tax deductible) and what applied to the home loan (interest on which is not tax deductible, unless for an investment property). As I still had a fair bit to pay off on my home loan when I began purchasing shares, it did take some administrative effort to differentiate between both amounts, particularly when it came to allocating repayments, but a well designed spreadsheet should make it a lot easier. If you only have a tiny amount to pay off, you could make administration easier by paying off the home loan balance in its entirety and then borrowing for share purchases. That means subsequent bank statements will show tax deductible interest without you having to split manually. This could be a more effective way to buy shares on credit than taking out a margin loan. The interest rate should be a lot cheaper and no risk of margin calls.

I know that the ATO have put some legislation in place to stop people abusing split loan structures but from my knowledge that was to stop people capitalising what should have been non-tax deductible interest on to the tax deductible balance.

ROE · 16 August 2011

bellenuit said:
If you have a redraw facility on it and know you will have a need to take out a loan in the future, perhaps pay down to $100 and leave it open. You can then access funds through your redraw facility without having to open a new loan with all the opening expenses. You will presumably have a better rate than alternative loans.

If you currently have other more expensive loans open, then you could possibly use the redraw facility to pay those off and have the benefit of a lower interest rate.

For a long time I used my home loan to purchase shares and just ensured that I kept good records to show what portion of the loan balance applied to the shares (interest on which is tax deductible) and what applied to the home loan (interest on which is not tax deductible, unless for an investment property). As I still had a fair bit to pay off on my home loan when I began purchasing shares, it did take some administrative effort to differentiate between both amounts, particularly when it came to allocating repayments, but a well designed spreadsheet should make it a lot easier. If you only have a tiny amount to pay off, you could make administration easier by paying off the home loan balance in its entirety and then borrowing for share purchases. That means subsequent bank statements will show tax deductible interest without you having to split manually. This could be a more effective way to buy shares on credit than taking out a margin loan. The interest rate should be a lot cheaper and no risk of margin calls.

I know that the ATO have put some legislation in place to stop people abusing split loan structures but from my knowledge that was to stop people capitalising what should have been non-tax deductible interest on to the tax deductible balance.

I'm unlikely to do that, I like debt free

Smurf1976 · 16 August 2011

A question regarding the Title, as in the physical piece of paper.

Am I correct in my thinking that these days the physical piece of paper is easily replaceable and thus not important to store safely, or indeed to keep it at all? Surely there's other records showing that I own the property?

Or should I be storing it in a vault somewhere?

pixel · 16 August 2011

ROE said:
I'm unlikely to do that, I like debt free

+1 to that
I could've had a very quick divorce, when I suggested we should take out a mortgage on the last home we bought, to buy shares. SWMBO, who had so diligently done the sums, even sold "her" WAN shares to get us into the new home without any mortgage, nearly burst a blood vessel when I suggested I'd like to buy a few thousand ANZ shares.
OK, they were $2.95 at the time - would've worked out alright, but who'd know in 1993?
No - much better off without debt and safe in the knowledge we own what we have.

pixel · 16 August 2011

Smurf1976 said:
A question regarding the Title, as in the physical piece of paper.

Am I correct in my thinking that these days the physical piece of paper is easily replaceable and thus not important to store safely, or indeed to keep it at all? Surely there's other records showing that I own the property?

Or should I be storing it in a vault somewhere?

As long as you can prove that you are indeed you, it should be possible to obtain a replacement copy. After all, that's what those Nigerians did, who stole some WA home owners' identity while the true owners were on extended Overseas vacation. Then they sold the property "as is" and had the money squirreled away by the time the surprised former owners came back to a no-more-Home.

It does cost however; so it's much better to take the paperwork and store it somewhere safe. It needn't be a bank vault, although if your property oozes wealth and abundance, some burglar might drop in and use the deed as wrapping for the jewelry or coin collection.

starwars_guy456 · 16 August 2011

pixel said:
As long as you can prove that you are indeed you, it should be possible to obtain a replacement copy. After all, that's what those Nigerians did, who stole some WA home owners' identity while the true owners were on extended Overseas vacation. Then they sold the property "as is" and had the money squirreled away by the time the surprised former owners came back to a no-more-Home.

It does cost however; so it's much better to take the paperwork and store it somewhere safe. It needn't be a bank vault, although if your property oozes wealth and abundance, some burglar might drop in and use the deed as wrapping for the jewelry or coin collection.

Yeah, we've changed our system to one such that "registration cures all defects". So that's why once you settle on a property, the bank will seek to register the transfer promptly (so they can put themselves down in the encumberances section) so nobody else can exclude the rights of the bank.

http://en.wikipedia.org/wiki/Torrens_title

Saying that though, I believe there is an insurance system to compensate people who are the victims of fraud under the Torrens system. They'll get a monetary sum, but will not be able to resume their old property.

Tyler Durden · 16 August 2011

pixel said:
They don't even give a toss, for how long you've been their customer - be it 30 years, 30 months, or 3 weeks.

Great quote. Definitely something that needs to be kept in mind.

I remember a few years ago, I was a junior doing conveyancing. My firm didn't specialise in conveyancing, I had little experience, my boss didn't teach us anything at all, and I had been sent from the suburbs to the city for a settlement.

When it came time to exchange documents, there was a $5 fee I didn't know about. It was something you'd know about only if you'd done a settlement at this particular place before.

All the cheques I had added up to the exact amount with the exception of this fee, so I was $5 short. My boss had this bad habit of paying us monthly, at the beginning of the next month, and since it was at the end of the month, I had no money in my bank account (or wallet).

I thought I could go into my bank (CBA) and ask for a $5 overdraft. I'd never done it before, but I had heard of the term so thought it was possible. I will never, ever, ever forget the look on the teller's face as I asked for $5. She went from a smiling, warm, welcoming teller to one looking at me with disdain and dirt, like I was a homeless bugger asking for spare change. I said "I've been with your bank for 15 years and I can't even get a $5 overdraft?"

I walked out of there with such cynicism that it became a life changing moment. It was the moment where the line "people only recognise money" came true.

Luckily, one of my very good clients was in town and I asked her for $5, although she thought I was just asking for an 'under the table' commission. I ran back to the settlement and got the job done, thereby avoiding extra costs for my client.

Julia · 16 August 2011

I can't comment about other States, but this is how it goes in Queensland:

Certificate of title

Under Queensland law, the true record of current title to property is held in an electronic system maintained by the Registrar of Titles in the Department of Environment and Resource Management’s Titles Registry. This is far more secure than maintaining paper titles. The department gives the security of electronic data the highest priority, and has appropriate back-up and other security measures in place for information in the Titles Registry’s Automated Titles System.

You can still request a paper certificate of title, (often referred to as the duplicate title or title deed), but you no longer need one as proof of ownership as the Automated Titles System provides the point of truth.

If you already have a current certificate of title, you should treat it as a valuable legal document, and keep it in a safe place, or store it with your solicitor or financial institution.

If you wish, you may return it together with a completed Form 14 - General request to the Titles Registry for cancellation (no fee applies). Please note that cancellation of the paper certificate does not affect the electronic title, which remains active in the Automated Titles System.

Hard to imagine in these times of everything being done electronically, the piece of paper would still be required.

Enjoy having that mortgage paid off, ROE. There's no better sense of satisfaction imo than that first fully paid for property.

ROE · 16 August 2011

Julia said:
I can't comment about other States, but this is how it goes in Queensland:

Hard to imagine in these times of everything being done electronically, the piece of paper would still be required.

Enjoy having that mortgage paid off, ROE. There's no better sense of satisfaction imo than that first fully paid for property.

Thanks, I prefer a system where the electronic is a true copy and you have a paper copy as a backup.

Funny how you go to the bank and draw out $1000 and they ask you for all sort of legal documents to prove who you are and a property worth hundred of thousand of dollar and people can go around and get away without proving who they are.

sound like our financial system where people can easily setup shop give questionable advices and stole million of investors money and you get done for giving simple advice on the forum and money never change hand

sptrawler · 16 August 2011

Smurf1976 said:
A question regarding the Title, as in the physical piece of paper.

Am I correct in my thinking that these days the physical piece of paper is easily replaceable and thus not important to store safely, or indeed to keep it at all? Surely there's other records showing that I own the property?

Or should I be storing it in a vault somewhere?

Check with your Lands Dept, but over here in W.A it is a pain in the ar$e and costs money.

Who has paid off their mortgage?

ROE

tech/a

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pixel

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nomore4s

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ROE

Smurf1976

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Tyler Durden

Julia

In Memoriam

ROE

sptrawler

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