Why is there a mortgage registered against my property when I know that I paid off my mortgage years ago?
When acting for Sellers, one of the first things I ask is whether or not there are any mortgages registered against their property. It is quite common that clients think that their property is “mortgage free” when, in fact, there is a mortgage on title.
Lenders typically register a collateral mortgage at the time that a line of credit is set up. Collateral mortgages can secure loans that are in existence at the time the mortgage is registered as well as future loans that the Borrower will obtain from the Lender.
Often clients stop using their line of credit and pay off the balance as they become more financially secure. Unfortunately, the collateral mortgage will remain on title until the Lender is specifically asked to register a Discharge. Note that even if there is no money owing, the Lender will still charge a fee to discharge the mortgage from title.
If you are thinking of selling your property and you had a line of credit which you no longer use, you should consider checking with your lawyer to confirm whether or not there is still a mortgage registered on your title. It can be a good idea to request a discharge from your Lender early rather than waiting until you have a closing date looming.