Advice on Full Discharge of Home Loan in WA Banking with ING

digitalfarmer on 03/08/2023 - 21:52
Last edited 05/08/2023 - 00:29 by 1 other user

Guys, I am in the process of closing of home loan and need some advice as this is my first experience closing my home loan.

Bank told me the following:
1) The fees applicable for discharge include:
• Balance of the loan
• Interest outstanding (from the first day of the month until the date of settlement)
• Discharge fee of $250 per security property released
• Government charges
• ING's solicitors charge a minimum fee of $300 (incl. GST)

2) After the loan has been discharged it is your responsibility to register the discharge on your title with the Lands & Title Office.

3) Once the loan gets discharged, you would be able to speak with our solicitors to arrange the delivery of the title

Contacted WA Land and Title office and they told me the following:
1) If the mortgage is held by a bank, must be lodged electronically. They should not be providing you with any discharge forms to lodge with Landgate. It is the bank's responsibility to lodge the discharge using the PEXA or Sympli system available in WA.

2) From the 7th of August this year, all duplicate certificates of Titles are being converted to a Non-Issue title.

My concerns:
1) Is there any catch with the information told by the bank?
2) Do I need to hire a settlement agent or solicitor from my side? (I am not selling the property, just clearing debt with my savings)
3) Any idea of approximate government charges in WA?
4) Landgate is not issuing the duplicate tiles copy from 7th Aug. Is this good or bad for the property owner? What are my other options to prove that the property belongs to me?
5) How do you protect your certificate of title from scammers/fraudsters?
6) Anything I am missing here or be careful with? Please advise.

Please share any other helpful tips/information if you have any.

Thank you all for your time providing the info.

Cheers

Financial Home Loan

Comments

  • Muzeeb on 03/08/2023 - 21:57
    +4

    Why discharge? Sure, it feels nice to be mortgage free but it's the easiest line of credit you'll ever get.

    • digitalfarmer on 03/08/2023 - 22:03
      +2

      Thank you for your reply, it's for peace of mind.

      • Muzeeb on 03/08/2023 - 22:07
        +3

        That makes sense. My peace of mind comes from knowing that I don't own the bank more than a weeks wage, have access to an instant line of credit and the title is extremely safe while the CBA has ownership to it.

        • digitalfarmer on 03/08/2023 - 22:12

          You are right. I might consider doing the same. Cheers

        • ssfps on 04/08/2023 - 02:09
          +1

          I wonder what possible ramifications there are, in extreme circumstances, to a bank holding the title for a paid off mortgages?
          For example, if the bank collapses, or if they were taken over by some hostile entity, lets say some Chinese or Russian boogeyman?
          Similar to savings accounts being theoretically at risk for bail-ins, are there any risks to us with them holding the deed?

          • Seraphin7 on 04/08/2023 - 10:41
            +2

            @ssfps: It would need to be a very extreme set of circumstances. A simple "bank collapse" isn't going to be enough to trigger issues with the title. You are effectively referring to societal collapse/military invasion type scenarios where the fact the bank is holding the title to your house rather than you, is not going to be the deciding factor in "what happens next".

          • ttt888 on 04/08/2023 - 11:47

            @ssfps: And you may get hit by a car the next time you walk out.. Yes everything there is a risk, But Sane people will quantify the risk and make appropriate judgement.

            • ssfps on 04/08/2023 - 17:34

              @ttt888: My question was asking about the nature of the risks to quantify them, but you haven't quantified anything. I'm interesting in hearing opinions from people that have looked into/considered the impact and incidence and quantified them.

      • omguleh on 04/08/2023 - 10:58

        Can't have it in an offset? No interested generated and any repayments you make into the account will be all principle. Plus you have access to the money just in case.

    • onetwothreefour on 04/08/2023 - 11:17

      but it's the easiest line of credit you'll ever get.

      I hear this a lot when there are talks of paying off a mortgage but I don't really understand why this is a benefit?

      My mortgage is 100% offset and I am thinking of paying it off within the next 12 months after I have built up my emergency fund. I hopefully won't ever need to borrow money again and if I do I don't think I'd want it secured against my house. I guess the only time I would need to borrow money again is if I decide to upgrade to a better house or want to buy an investment property but wouldn't it be easy just to apply for a new loan in those instances?

      Not saying your way is wrong, I've just heard it a lot but it's never made sense to me so I probably need to look into it more, particularly because I am now in a position where I need to make a desicion.

      • JimB on 04/08/2023 - 11:27
        +1

        "hopefully won't ever need to borrow money again and if I do I don't think I'd want it secured against my house"

        If you ever borrow again, even if it's not secured against your house and you don't make repayments, they will still go for your house.

        "buy an investment property but wouldn't it be easy just to apply for a new loan in those instances?"

        You could always borrow against your house to buy an investment property. Or draw 20% deposit against your house to use as the deposit so you're 100% geared without paying LMI.

        • onetwothreefour on 04/08/2023 - 13:00

          they will still go for your house.

          that's good to know

  • JIMB0 on 04/08/2023 - 06:26
    +3

    Having a mortgage registered on your title means to transfer ownership the bank must be consulted as they have an interest in the property. This can stop someone fraudulently selling your property without your knowledge.

    This is the main reason I took out a mortgage, that and the line of credit if I ever need it.

  • deveshwar0 on 04/08/2023 - 09:20
    +1

    You can always pay off the loan and leave the title with the bank, just don't discharge the mortgage.
    They'll keep the title safe for you in the hope that if you ever need the loan again you'll come to them first.
    If in the future, you want the title for whatever reason just pay the fees and get it discharged then.

  • Seraphin7 on 04/08/2023 - 10:38

    2) Do I need to hire a settlement agent or solicitor from my side? (I am not selling the property, just clearing debt with my savings)

    I would (and have). It just means you're not the one getting the runaround if it comes to it.

    That said, and as others have said, if you have a 100% offset home loan or redraw facility, I would consider just keep it going and maintain access to the funds should you ever need it.

  • sam-1966 on 04/08/2023 - 10:39

    Our loan was paid off and we just left the title with the bank. Came in very handy a few years later when we wanted a small loan - instead of a personal loan, we could get a $20,000 loan at a much lower interest rate.

    • digitalfarmer on 04/08/2023 - 16:14

      Can you please explain this in detail. What do you mean by loan paid off?

      In my case I have ING orange everyday account with positive balance of exact same amount of my offset loan negative account balance and every time my loan repayment got deducted from my ING orange everyday account, the positive balance of the ING orange account account becomes low and negative loan account balance becomes low with same amount and I dont pay any interest to the bank.

      I am only paying $399 per year offset account fee.

      Is this what you are referring to or am I missing something?

      Please reply thanks.

      • deveshwar0 on 04/08/2023 - 16:21

        What they probably mean is that they closed the initial home loan but left the title with the bank rather than discharging it.
        Later, when they required a small $20k loan, they borrowed against the same property with the bank getting the home loan interest rate rather than getting a personal loan with a higher interest rate.

        • digitalfarmer on 04/08/2023 - 20:01

          Oh, I see. Thanks

        • sam-1966 on 05/08/2023 - 11:43
          +1

          Exactly that, deveshwar0.

          Much simpler and cheaper than any other type of loan.

        • murphy09 on 07/08/2023 - 21:24

          Is it possible to close a home loan without discharging the mortgage and incurring the discharge fees? I always presumed the mortgage discharge happened automatically after the home loan was closed?

          Closing the home loan means there is no risk of the redraw amount being stolen/scammed. Leaving the mortgage in place means you can easily get a loan with bank account if needed for renovations, car purchase, etc.

  • knasty on 04/08/2023 - 11:15
    +3

    Slightly off topic…

    Be careful when discharging a mortgage where you have funds sitting in an offset account. The bank may not include the offset benefit in the month in which the mortgage is discharged - I had this happen when my mortgage settled in the last week of the month and was up for an extra couple of grand of interest I wasn't expecting/could have avoided by either paying down the loan account with the offset balance or by timing settlement for the first couple of days of the month.

    • digitalfarmer on 04/08/2023 - 20:02

      Thanks for letting me know.
      If I reduce the principal of the loan amount as a first step and leave only $1000 as the loan amount and then ask the bank to close the home loan account in the second step, do you think I can avoid the risk of unexpected heavy interest if the bank takes its time for the settlement? What are your thoughts on this?

  • Lunarboogie on 05/08/2023 - 10:13
    +1

    For years I bought into the 'line of credit' mantra and kept my mortgage open with $50 owing. But in doing so, it made credit card applications all that more harder (I'm a churner) as card providers would calculate my debt liabilities at the original mortgage amount. This created headaches that I didn't need, so last year I paid it off and have not lost a wink of sleep since. If I ever need a line of credit (which I think is doubtful), I'll simply borrow against the property using the equity. Doing so would also give opportunities to partake in $4,000 promotions and the like that you see crop up on here like rice at an Italian wedding.

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