Curious - What happens to a property's title if the loan is paid off

Dear all

I have a simple curious question and I hope that someone can help me out. For example, if a person has a loan with a property; and that person manages to pay off the loan. After a few days, the loan on that property is disappeared. What is the next step that person should do ? (a) Approach the bank and pay some money to get the title (and keep that at home) or (b) Leave the title with the bank ? Will the bank still have a record of that years later ?

Which option is better, (a) or (b) ? Thanks.

Regards

Helen

 

In many cases banks lose title deeds. In some banks you must request a release of the mortgage as its not automatic. Others are. Its good practice to get the deed asap.

 

Thanks Rolf and Paul.
Assume that the owner doesn't need to sale the property for a number of years. Is it better to leave the title with the bank or to keep it at home ? Also, how much does it cost to discharge the title ? Thanks.

 

What is certainly true is that if there is no mortgagee on title, there is one less set of eyes verifying it is OK to release a property to a purchaser. Such was the dilemma in WA a few years ago, when I believe some Nigerians zero'd in on this fact, found an affluent home that had no mortgage attached to it, and literally emailed a selling agent claiming to be the owner, and requesting the property be sold, which it was. Whilst the true owners were away on holidays. They returned "home" to find that their home was no longer theirs.

This is why there is now a more stringent identification process in place in Victoria when transacting on property. I presume similar measures are in place in the other states.

The moral of the story is, even if it is just a tiny mortgage, maybe as a safety net, it is a good idea to leave it there. At least then your bank would contact you if you were supposedly selling your property. It gives you an opportunity to say "Wait... what? Nooo, I did not initiate or authorize this sale! Stop the process immediately!"

 

There are loans and then there are mortgages - a mortgage is a form of security which is a charge on the title. With borrowing against property you would have both a loan and a mortgage. You give the bank a mortgage over title, and paying out the loan does not automatically release or discharge the mortgage, this is a separate process. You can leave the property mortgaged usually or you can have the mortgage discharged.

 

Even better than that is to lodge a Landowners caveat

To minimise the risk of property fraud, WA landowners can place a caveat (improper dealings) on their own property to help prevent an unlawful change of ownership.​

Landowners caveat - Landgate

 

I would keep a small mortgage of some kind on the place, or get it back and keep it somewhere safe.

 

In QLD you rarely have a certificate of title anymore.

Very common to find that a mortgage remains listed on the title years after it has been paid off. This gets interesting when the bank no longer exists (usually because it was purchased by someone else years ago) and you have to find a way to get the mortgage removed.

 

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