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What you need to know about discharging your mortgage in Scotland

What you need to know about discharging your mortgage in Scotland

Nearing paying off your mortgage? Congrats! But before you pop the champagne, there’s a few things you need to do, including a formal mortgage discharge. But what is a mortgage discharge and how do you do it? Here’s everything you need to know about discharging your mortgage in Scotland.

What is ‘mortgage discharge’?

Basically, a mortgage discharge is a signed document from the lender indicating that the mortgage contract has been fulfilled. Discharging the mortgage ends the lender's legal claim to your property.

If you have just paid off your mortgage, or if you’re about to, you will receive a letter from your bank reminding you that you need to speak to a solicitor about preparing the formal “discharge” of the bank’s security.

Why do I need to discharge my mortgage?

Your bank won’t automatically contact the land register to request that their records are updated and you need a solicitor to submit the appropriate application to the bank before the charge is removed from your title.

How do I discharge my mortgage?

Discharging a mortgage is a straightforward process and your solicitor can handle the procedure seamlessly. Recent changes to mortgage discharge in Scotland means that discharging a mortgage is easier, quicker and cheaper than ever before. Your solicitor will be able to confirm whether your mortgage provider is signed up to this service.

When do I need to discharge my mortgage?

Most homeowners will choose to discharge as soon as possible, but the process doesn’t become more complicated or more expensive if you don’t deal with the discharge immediately. However, the discharge has to be processed at some point and the bank will close off their records fairly quickly after the account has been paid off. This means if you leave it too long to request the discharge, the bank may have closed off their records and may not be able to process things in the normal way. If the discharge is ignored, when you come to sell the property it may be a challenge for your solicitor to get the appropriate discharge signed and that could delay completion of your transaction.

Do I need a solicitor to discharge my mortgage?

The preparation of deeds is a legal process, and so most lenders will strongly recommend that you contact a solicitor to ensure everything is legally binding and correct.

How much does it cost to discharge a mortgage?

Your bank will have taken account of their own administration fees when they gave you a figure to pay off the mortgage and they won’t charge anything more for consenting to the discharge, but both your solicitor and the land register will have their own charges to complete the process. The land register has their own fee of £60 or £80 depending on the method of discharge, and solicitor fees can vary. The team at Burnett & Reid can assist you with discharging your mortgage at an affordable rate. Get in touch with the team to find out more.

How long does it take to discharge a mortgage?

The land register are usually very quick in turning around mortgage discharges so a few weeks from the date of instruction is usually enough for them to update their records.

What happens if my mortgage is not discharged?

If you don’t discharge your mortgage, your bank will remain on your title deeds as a party with a right over your property. If you decide to sell your house at any point in the future, you will need to have the mortgage removed. Many homeowners take the opportunity to discharge as soon as the mortgage has been paid off for peace of mind and to prevent any possible problems further down the line.

Once the mortgage has been discharged, what do you do with the paperwork?

It is possible the title documentation contains ancillary paperwork (things like local authority approvals for alterations to the property or timber repair paperwork for things like wet rot or woodworm treatment). It would be an idea to check with your solicitor before throwing anything away. Many homeowners prefer title documentation to be held by their lawyer and most solicitors will retain title documentation free of charge in secure storage. However, your lawyer is probably not going to need the title documentation to process the discharge and will work from a land register copy of the title instead.

The Burnett & Reid team are well versed with mortgage discharge services, so if you need assistance in discharging your mortgage, please contact our team.