Alec: wanted to sell his house that he’d own for 35 years. After signing and having Clearman Lawyers review his Contract, it became clear that although he had paid off his home loan over five years ago, the mortgage was still registered on Title.
Although a Mortgage on Title does not prevent you from entering into a contract to sell your property, you need to be careful that:
- your bank is aware that you’re selling the Property. This is done through a form called a Mortgage Discharge Authority or just simply a Discharge Authority (you’ll need to look online or speak to your bank to obtain this document); and
- there is enough equity in the property to cover your mortgage balance plus any settlement costs or you have enough funds to cover the Mortgages
A mortgage is a type of security that secures a loan. This means that whenever anyone says they’re paying off their mortgage, they’re actually paying off their loan which is secured by that mortgage. A mortgage will remain on Title until:
- the underlying loan is paid off and you request the mortgage to be removed; or
- you sell the property and ask your Lender to release it’s mortgage (through a Discharge of Mortgage) in exchange for paying out the remainder of your loan; or
- you refinance (switch lender’s) your property and request your current Lender to release it’s mortgage (through a Discharge of Mortgage)
- selling your property.
- refinancing or paying off your loan.
- releasing your property in mortgage obligations.
- substituting an existing security for another.
- releasing a guarantor from your loan.
- Fill out and submit a Discharge Form to your lender a month before the settlement date . Discharge requests can take up to. (2-4) weeks to process.
- Allow enough time to your lender to complete the discharge process so that you can be certain that everything is ready for settlement.
- Make sure you talk with your conveyancer very early so they can help you to be ready for the settlement date and arrange any outstanding balance from your mortgage that will be taken out from the sales proceeds.
This page is not intended to provide legal advice and does not create a client-lawyer relationship. This post is provided for general information purposes and should not be relied upon as a substitute for legal advice. If you need help with legal advice for your particular situation, please contact our office (details below or on ‘Contact’ page) and we’ll be happy to assist y