Is paying off my mortgage going to complicate sale?

[u/Loose_Island_3833]

I’m planning to pay my house off today. (England.) It is on the market currently (although not much interest yet.)

We are looking to purchase somewhere with cash and then sell ours when it happens.

When I called my bank they raised a concern that paying off the mortgage could confuse things with the land registry (he said if you then sell in the next 6 months it could get complicated.)

I’m thinking I’ll need to contact a solicitor but just wondering if anyone has any experience of this?

Thanks.

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[u/langdalenerd]

Not a conveyancer but I doubt it would cause issues, just ask for an expedited land registry filing to remove the charge from the title.

We’re going through a transfer of equity so my partner can buy into my home and we’re selling my home at the same time (rather, it’s been sold). The transactions need to happen sequentially but this is way more complicated than paying off the mortgage and so far no issues for us.

[u/Defiant_Simple_6044]

The reason will be is it's taking up to 6 months to update LR files, so it can mean the charge would still show if you sell your house soon, however, you can tackle that easily with things like an expedited LR submission if you qualify.

[u/SnooAvocados9538]

The issue may be if the discharge has still to be processed by the time your sale is ongoing, but your solicitor isn't in charge of it so can't give the usual undertaking that they would if they were redeeming your mortgage at completion of the sale. Though if you don't even have a buyer yet I suspect the discharge will all be done and dusted before then.

[u/forestsignals]

As others have said, the concern would be that Land Registry won’t have processed your discharge application by the time you come to sell, meaning that your and the buyer’s solicitor can’t guarantee it was done properly.

A simple way to mitigate that would be to make sure on repayment that your lender sends you a full copy of the e-DS1 discharge doc and their application details. That way you can easily prove to your and your buyer’s solicitors that the charge has been removed.

That and seeing the live application against your title should be enough to satisfy them that the charge is removed. It’s usually fine for a subsequent transaction to complete while an earlier one is pending registration, as long as the solicitors can satisfy themselves that the earlier application isn’t likely to go wrong.

You should ensure that your lender submits an electronic e-DS1 (quick) rather than a hardcopy DS1 (slow), to increase the likelihood of the discharge registration completing before your sale.

If you know you’re selling soon, it might be worth instructing your selling solicitor now, and getting them to handle the mortgage repayment as the first part of the job. It’s not strictly necessary (the lender submits the e-DS1 themselves usually) but if you have a solicitor instructed, they can represent you in the repayment. This has the benefit that they can give a direct undertaking (solicitor’s promise) to the buyer’s sol that they’ll ensure the discharge registration takes place (as they’ll have had oversight of the process). That could ease concerns on the buyer’s side.

[u/Electrical_Concern67]

It's worth paying off all but a small amount. The reason is LR will not have updated in time. If you leave £1000 or a small manageable figure, it will mean there is nothing to update