We have had several clients in the last month who have had issues with their property titles. The standard process is the title is released to the owner once the mortgage is paid out in full. What most people do not realise is that they still need to submit the discharge the lender provides them with to the titles office to actually clear the mortgage over their property.
What does this mean? This means that the title still shows as the lender holding a mortgage over the property. When the owner looks into finance at a later date they will have issues with the new lender. The new lender will need a clear title to register the new mortgage. This holds up settlement indefinitely until the issue is resolved.
Now as this has happened to our clients several times in the past we are prepared and have a process to handle such situations. We work closely with the clients, the new lender and the past lender to get the title processed and get the loan and settlement through.
How can you avoid this happening to you?
• When you make your final payment on your loan (celebrate!) and THEN make sure you complete a discharge form with the lender.
• Follow up with the lender to ensure the discharge is received and processed (quite often gets lost)
• The original property title should be send to you (might be an electronic copy as that is the way of the future). Store is a VERY safe place!
• make sure you send the discharge the lender provides you with to the title office along with the fee to discharge the mortgage fully.