Paying off entire mortgage, don’t want to mess it up

[soldier4jesus89]

@asjasj123 I think there usually is, yes.

 

[bmsmith5107]

@asjasj123 There always is since the documents they have to file to remove the mortgage from your property register incur a fee. They aren’t eating that. Your mortgage disclosure has the fee listed.

 

[_h_]

@asjasj123 It’s often minimal. Like $500 or less

 

[111debi]

@rhandi This guy adults

 

[yodamama]

@rhandi And I assume you also paid a lawyer to discharge the lien? Is there a lien on your house still?

 

[dorisneal]

@rhandi I don't think so. Did you gat a notice of final statement and ownership. Did you get Notarized documents from the bank or through your own Notary Public ( Quebec ) stating you were now the owner ( along with the deeds - property tittles) If not, get them. When we paid off our house, decades ago in Quebec, we received all these...

 

[mrjobosco]

@randar Just talk to the bank that holds the mortgage currently. They will guide you through the process.

 

[gordiehowe]

@mrjobosco This. Call your mortgage lender and they will tell you exactly what you need to do and what you can expect. Don't wait for the last minute though.

 

[mornevh]

@randar Ensure you pay on the right date and don’t expect any congrats- it was very anti climactic

But congrats!!

 

[ckmn101]

@mornevh I can totally understand no congrats from the lenders. They'd prefer if you were indebted to them longer while still making payments. You don't make a ton of money from responsibly financially savvy people.

 

[barbswalk]

@randar

and like many others I’ve decided it’s preferable to pay it off entirely instead of renewing at the current interest rates.

"Many others." This sub is fantastic sometimes.

 

[dawnbirduk]

@barbswalk To be fair many others are paying it down or off compared to normal at their renewals. A lot of people right now aren’t betting on the market beating 6%

 

[are9are9s]

@dawnbirduk 6% after tax is tough to beat.

 

[dawnbirduk]

@are9are9s The ability to claim your RRSP contributions against taxes and max your TFSA allocations may still be quite good. Usually I’d imagine that’s around 25% tax avoided on that income.

 

[ipurr2]

@dawnbirduk RRSP is tax deferred, not tax free. If you have high enough income to make the RRSP deduction likely that advantageous in long run, then you can probably afford to both max RRSP + TFSA and pay down some of mortgage early.

If your income is not that high probably better to just pile into mortgage at this point IMO, certainly safer and better for sleep

 

[dlnott78]

@ipurr2 Paying down a mortgage doesn’t quite feel the same when your home value is less than your mortgage balance

I do agree that it’s hard to beat a guaranteed 6% post-tax return but the math should be done on the average rate across the life of the mortgage, not necessarily current rates. Of course no one really knows what that number is but it’s likely less than 6%. Our current economic model is unsustainable at these rates.

 

[hurdygurdyman]

@barbswalk “Just pay it off bro”

 

[nikki12]

@randar Can I ask another question? I know this might get lost in the comments but I'm not sure that it deserves another thread unto its own.

I've read here at PFC over the years, that to prevent fraud, you should pay off your mortgage, but ask the bank to keep the lien on the property intact. I'm assuming this means keeping the HELOC open if there is one (we have one that we haven't used).

Is this the accepted practice? I kind of get why, but was unsure if this is what everyone does or should do.

 

[chaselovely]

@nikki12 You can also buy one-time title insurance. To do this, you have to go through a notary or lawyer.

 

[nikki12]

@chaselovely Ah, makes sense, I think we got title insurance when we bought the place, but a good thing to double check on.