OT - How to close a home mortgage for less then $250?

[riu girl]

We just made final payment on our home mortgage and have asked the bank to do paperwork to discharge the mortgage.

Have been told they can do the final discharge paperwork for the tidy sum of $250.
The other option we were given was to take the info. from the back and a lawyer can do it.

I was not expecting a $250 charge.

Does anyone know of any less expensive options to get a house mortgage discharged??

Thank you

 

[SandraC]

No, but CONGRATS!

We paid off our mortgage 8 years ago.....I was 35 and dh was 40.

That's what I gave him for his 40th birthday. I saved up the last couple of thousand dollars and paid off the house.

I wrote a poem and it. It was very cool!

S

 

[eeyoremum]

Sorry I have no answer. Just another question. Do you really have to pay to have your morgage discharged????? What a rip off. I mean with the intrest we pay over the years...ugh

 

[riu girl]

Thanks for the congrats. It hasn't sunk in yet at all what we have accomplished.

Yes it looks like we do have to discharge the mortgage. I think that there is a $65 fee for doing the discharge (paid to the city that the house is located) plus the $250 for the bank to do the paperwork!!!

I called our financial advisor and he said that a lawyer wil probably charge AT LEAST $250 to do the paperwork so I think on Monday I might call some paralegal agencies to see if I can find someone who can do it cheaper.

Anymore ideas anyone???

Thanks

 

[A&CsMom]

Congratulations!

I think the bank's rate is not bad at all, and you want to make sure it is done right.

Paralegals are not allowed to practice real estate.

I believe the fees alone paid to the gov't to register a discharge is around $70, plus if they have to do an up-to-date property search to check out the title that's another smaller amount to the gov't.

Your financial advisor is right, lawyers would charge more than $250. However, if you are determined to get a lower price and have the time, you can call around to different lawyers in your area to confirm that. January is probably a slower month for real estate lawyers and you just may have some luck.

 

[Nagle]

We were fortunate enough to pay off our mortgage about 5 years ago and the cost to take care of the discharge paperwork was about $180. I was absolutely shocked. I asked them if the president of BNS was doing the paperwork personally. They were not amused. Thieves!

 

[FayeW]

The $250. is a standard discharge fee. Actually, some lenders are now charging $300. to discharge.

The bank isn't making any money from the discharge (or very little). When you take a mortgage on your home it is registered with the Land Registry Office in your city, township or county. That is part of the closing cost that you pay the lawyers when you purchase a home, because the bank is holding your home as security against the mortgage loan.In order to release the bank's interest in your property they have to "discharge their interest" which is a legal process. The fee they are charging is most likely the actual fees they are paying to their lawyer to discharge their interest (and perhaps a small admin fee).

The bank has probably negotiated a "bulk rate" with the lawyer(s) that do their discharges. It would probably cost you more to go to your own lawyer but it is necessary so that the bank security is discharged. Otherwise, if you ever wanted to borrow against the home again (secured credit line for investment purposes, etc) it would show up on a title search that another lender already had a lien against it.

Kinda sucks, though, that after we pay all of that interest over the years, we still have to pay to discharge the banks security. It is in our own best interests so that we know it is done, but I still think the lender should pick up the tab.

FYI, it is the same if you are just switching your mortgage from one financial institution to another (when your mortgage is up for renewal). The $250. fee is usually capitalized into the transfer amount, and shows on the discharge statement provided by the "losing" bank to the "gaining" bank. The fee is also disclosed on the mortgage commitment that you sign when you accept the mortgage in the first place.

ETA: For those of you with homes paid in full, or alot of equity in your homes, remember that in Canada we are allowed to write off the interest we pay on loans taken for inverstment purposes (as long as it isn't in an RRSP). So, if you put a secured credit line or mortgage on your home and invested that money in high yield mutuals, investment property, etc, you could write off the interest you are paying against your income.

With mortgage interest rates so low right now it is entirely possible that you could borrow money at 6%, and invest it in something earning 8-10%, plus lower your income taxes with the write off. I had a client who had enough funds in his liquid investments to pay out the balance of his $200K mortgage. Then we placed a new mortgage for the same amount and put the money right back into his investments. This created a paper trail that will be easy for Revenue Canada to track to see that the money was indeed for investment purposes. Now, he has a mortgage payment of $1200 per month (exactly what he had to begin with) BUT he can now write off the $900 per month he was paying in interest!

It's called "The Smith Manoeuver" and the whole idea is that you get a tax break now on your salaried income and pay tax later (when the stocks, mutuals, etc are sold) which ideally would be when you are older and have less taxable income (same principle as RRSPs).

Food for thought for some of you. Anybody who wants more info can PM me, or google "Smith Manoeuver".

 

[Tantor]

Congrats!!!

We paid off ours 2 years ago. What a great feeling!!

 

[CdnMom2]

I haven't been on the boards for awhile, but that was cheery news from all of you to hear on return. Also a pleasant reminder to keep doing the right thing & put off on another Disney fix for awhile. We're still plugging away at our mortgage.

Thanks for the helpful info on this thread & congrats to all of you who really own your homes now!

 

[toesmom]

We just made final payment on our home mortgage and have asked the bank to do paperwork to discharge the mortgage.

Have been told they can do the final discharge paperwork for the tidy sum of $250.
The other option we were given was to take the info. from the back and a lawyer can do it.

I was not expecting a $250 charge.

Does anyone know of any less expensive options to get a house mortgage discharged??

Thank you

Our financial planner was explaining to my dh about leaving mortage on title so that in future you can always borrow up to the amount of the original mortgage if you ever run into financial crisis. Check this suggestion out with your bank or financial planner. Our mortgage is due to be paid off in April (yay!!!!) and we don't plan on taking it off our title.

BTW... mortgage almost paid off... BWV 60 pts add on yesterday

 

[DearDaisyinDurham]

This is such great info!!! Thanks everyone!!!