# Mortgage discharge when paid off???



## digitalatlas (Jun 6, 2015)

I was reading this thread (http://canadianmoneyforum.com/showthread.php/68778-Paying-off-Mortgage-in-Full/page3) and was surprised that you need to get your mortgage "discharged" from the title??? What does that mean?

I had (have) a re-advanceable mortgage from BMO, basically one of those HELOC with a fixed portion (mortgage, regularly monthly payments) and a revolving portion (like a revolving HELOC). As the fixed portion was paid off, more was accessible on the revolving portion, up to the maximum I for which I was approved.

Last year I paid off the remainder of the fixed portion (i.e. "mortgage") and i didn't have anything on the revolving portion....so whoopee. Anyway, I didn't do anything after that. I still have the HELOC but now there's no balance on the fixed portion, and I have the full (large) amount available on a revolving HELOC.

Is there some paperwork I need to file with the city, or get a lawyer involved or something? How do I check if my mortgage is off the title? The municipality? If I still have this HELOC, does that mean I will have the mortgage on title? If I originally got a HELOC, does that mean I actually never had a mortgage to begin with? Whenever I check my credit rating, the HELOC just shows up as revolving credit, and not mortgage....

Thanks!


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## Just a Guy (Mar 27, 2012)

The bank still has a claim on your house as long as you have the heloc. You may have paid it off, but at any time you can borrow against your house, so the bank remains on title unless you want to get rid of the heloc. Paying off the mortgage portion doesn't mean anything as the bank still requires collateral against any future loan on the revolving portion. 

When you pay off the mortgage, the bank no longer has a claim on your property (a mortgage is different than a heloc, once it's paid off you can't borrow against it) so the bank discharges any future claim against your property (since they no longer need collateral to protect their loan).


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## digitalatlas (Jun 6, 2015)

Thanks, that makes sense.

I guess I'd have to close the HELOC to remove the bank's claim. But with a 0 balance on both fixed/revolving portions, there's really nothing for them to claim, right? They can't claim anything if I don't owe them anything. If I were to close the HELOC, I'd obviously have to go in and do this personally...I'd imagine as part of the account closing they'd remove their claim from the title....? er...is..this some kind of notice that's sent to the municipality? do I go to the municipality to verify this? What department deals with this kind of thing?

The question then becomes whether or not I need to keep the HELOC. I don't have any immediate need for it. I guess to help bankroll future investments or business, but hopefully only as a last resort after other funding...


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## Mortgage u/w (Feb 6, 2014)

Every province holds a registry of all the properties which are filed according to their lot numbers. In essence, all lots are in a registry. When you purchase a home, or a lot, your lawyer (or notary) will go on the registry and register the sale - basically assign the lot to your name. If a mortgage is taken to finance the purchase, a second entry is made for the lien that the lender will take - also registered by the lawyer (or notary).

When you finish paying off your mortgage, your lender will request the mortgage to be taken off title (discharged). If you have a HELOC registered, then you have the option to keep the lien on title. There are benefits to this; 1- if you ever need low interest financing for whatever reason, its always available to you and no need to re-register title or re-qualify. 2- leaving a lien on title can prevent 'title fraud' where this limits someone to illegally register a mortgage on your property. This shouldn't be a main reason not to discharge a HELOC but it has some value.

Hope this clarifies your concerns.


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## digitalatlas (Jun 6, 2015)

Thanks, it does!


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## OptsyEagle (Nov 29, 2009)

and don't forget. The bank does nothing for free. There will eventually be a "discharge fee" to pay the legal costs of the bank going to the registry to remove them from your title. I think it is in the neighbourhood of around $250 and I imagine it vari's from bank to bank.


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## nobleea (Oct 11, 2013)

OptsyEagle said:


> and don't forget. The bank does nothing for free. There will eventually be a "discharge fee" to pay the legal costs of the bank going to the registry to remove them from your title. I think it is in the neighbourhood of around $250 and I imagine it vari's from bank to bank.


If it's a readvanceable mortgage like the Readiline, this was probably registered as a collateral mortgage on title, rather than a simple mortgage. You can get it cleared through a lawyer, but expect to pay a fair bit more to get rid of it, more like $1000 if I recall.


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## digitalatlas (Jun 6, 2015)

hm....good reminder, thanks to both of you. I guess i'll leave it alone for now but keep in mind in case one day i want it to get discharged for good. talk about a slap in the face. not only is there almost a social stigma against paying off one's mortgage, the bank slaps you with additional fees for paying off your loan...


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## Just a Guy (Mar 27, 2012)

Hey, some lawyer has to send their legal assistant to the computer to print out a form and then submit that to land titles...you can't expect that work to be done for free now can you?


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