Selling a house

[sammd]

Could someone please explain what happens when you sell a house, assuming you're half way through paying a 25 year mortgage and you're not buying another house? Do you just pay off the mortgage lender what you owe them (does that incur an early repayment charge?) and then just keep the rest?

[antiguru]

The mortgage lender has an interest in the house (the Deeds will be stored with them) so in order to complete the sale you will have to repay the outstanding capital loan from them from the sale proceeds. If you use a solicitor this happens automatically.

Whether or not there is a penalty depends on the terms of your mortgage. If you're half way through I'd be surprised if there was one. Lock in clauses don't usually last that long in this competitive market. Dig out your mortgage documents and check or better still talk to the lender.

But yes, you get to keep the rest. That's why people invest in property!

[dannydingbat]

You will get your house deeds to keep safe. They are very precious so why not pay off your mortgage apart from a small sum and let the lender keep them safe. It's cheaper than asking the bank to do it. Speak to your solicitor what;s best.

[lady_p_gold]

There are no deeds to the house anymore I think you will find .... the Land Registry listing is what is important.

[dannydingbat]

Sorry Lady p - you are not quite right Although there is a land registry listing in most cases, there are still some unregistered properties in this country as they only have to be registered on first disposal. The Land Registry listing shows that the land is owned by someone and, currently, will also show that there is a mortgage on the property. A document called the Charge Certificate is held by the mortgage lender. When the loan is paid off, this will be replaced with a Land Certificate to show there are no loans or charges against it and the names of the owners. If this is lost, it is not simply a question of applying for another one. It's a nightmare. Consequently, the Land Certificate is precious and must be kept safe as the only evidence that you are the owner and entitled to dispose of it.

[buildersmate]

Sorry dannydingbatbat - you are not quite right. You won't be able to retain a small mortgage if you don't own a property any more. There is nothing for the lender to secure the loan against. And if you've sold the house, you won't have either a LR registry entry or the deeds (for unregistered land).

[dannydingbat]

Yes,, buidersmate, you are dead right. I had lost sight of the original question and I was working on a mortgage redemption without a sale. Apologies. I will write "I must pay attention" 500 times!

[sammd]

Thanks for all the info...