Many homeowners use lines-of-credit to borrow money, particularly when large loan amounts are needed/wanted. Once you pay off this kind of loan, there’s one more thing to What is it? Keep reading to find out!
For these larger loans, the creditor will probably want security for the debt. If you own a house, the creditor may use your home as security to ensure you pay back the loan as promised. This type of loan is called a “secured loan.” To safeguard its security, the creditor will formally register a charge against the title to your home, similar to how a mortgage works.
Once you have repaid the line-of-credit in full and decided you no longer need it, don’t forget to remove the charge from the title of your home (as it can be very difficult to sell your home with a registered charge still on it).
The law in BC requires the creditor to provide you with a discharge document when the debt is fully repaid and after you request the discharge. You have to pay the creditor to prepare this document (called a “Release”), but the maximum amount the credit grantor is allowed to charge under the law is $75.
With the Release document now in your hand, you can either file it yourself with your Land Registry Office or hire a lawyer or notary to do this for you. Please note that The Land Registry Office can charge you an administrative fee to file the release.
We hope this information was helpful!
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16 thoughts on “Paid off your secured line of credit against your home?”
Hi! We’ve paid off our home, but certainly used line of credit and had car loans. Is there some way to check what is possibly out there as a lien on my house?
Also, I get notices that I should have insurance against the possibility of someone selling my house without my knowledge. I can’t even imagine this. Is it possible?
i paid my mortgage off months ago. months later i wanted proof on paper that in in the clear, Bank would not give me it as l have line of credit with no money owing, so they charge you 312.00 for paying your bills, this is crazy
they also insist on putting insurance on the line of credit. The consumer should calculate what they are paying in premiums on this, as when I asked the bank for a calculation they miscalculated it, calculating the amount owed in per hundred dollars of value and not per thousand dollar of value, which it actually was.They referred me to the insurance company they had on the loc as they couldn’t explain it. If they do this you need to know the certificate and group number, before the insurance company can speak to you about any discrepancy. I hope this helps other consumers. They could find they have also been paying
[quote name=”Joan Foster”]Hi! We’ve paid off our home, but certainly used line of credit and had car loans. Is there some way to check what is possibly out there as a lien on my house?
Also, I get notices that I should have insurance against the possibility of someone selling my house without my knowledge. I can’t even imagine this. Is it possible?[/quote]
Hi Joan! Thanks for your questions. There are two organizations that you may want to check: the Land Registry Office (which deals with “real” property, like land) and the Personal Property Security Registry (which deals with personal property, like your car). Here are links to these two places:
For your second question, I’ve heard about this fraudulent activity happening sometimes in the US, but I can’t say whether or not this is a serious issue in Canada (as our laws don’t cover this specific area). You may wish to have a talk with you bank (or even a lawyer) to assess the risk and to determine what the cost/benefit ratio is for this kind of insurance.
I hope this was helpful!
[quote name=”Jennifer”]they also insist on putting insurance on the line of credit. The consumer should calculate what they are paying in premiums on this, as when I asked the bank for a calculation they miscalculated it, calculating the amount owed in per hundred dollars of value and not per thousand dollar of value, which it actually was.They referred me to the insurance company they had on the loc as they couldn’t explain it. If they do this you need to know the certificate and group number, before the insurance company can speak to you about any discrepancy. I hope this helps other consumers. They could find they have also been paying
Thanks for sharing this information, Jennifer! Consumers may also be interested to know that, by law, consumers may pick a qualified insurer of their choice (as long as they meet certain requirements), and that the creditor has to have reasonable grounds to deny the chosen insurer.
You mention a maximum $75 for a dischage. Does this apply only mortgages from banks and credit unions, or does it apply to mortgage loan made by a private mortgage lender?
Thanks for the question, Ron. According to the law, this $75 maximum applies to any credit grantor — so banks, credit unions AND private mortgage lenders. Hope that helps!
Hi Sue, thank you for your comment. With your question, I suggest that you contact the Real Estate Council of British Columbia. Their link is here…http://www.recbc.ca/ I hope this helps!
Can I sell my house with a realistate agent even if I have a secured line of credit?
If your line of credit is secured by a mortgage, that mortgage will need to be paid out at the time of sale. You can sell the house in the usual way – just remember that the line of credit will end with the sale unless you make other arrangments with the lender.
Talk to your local Notary Public if you have any questions.
I am paying off my line of credit with National Bank and want to get the mortgage against my house securing that LOC discharged I am in Nova Scotia. National Bank is saying that I must have a lawyer prepare a document for their signature. In the past the lender has always done the document. How do I get National to send me the necessary document with a proper signatory signing off I can register it myself at Land Titles but want to get it off asap since it make a big difference on my insurance premium.
Hi Jean, the law in this blog post is BC’s provincial law so I’m not sure how it works in Nova Scotia. You may want to contact your local consumer protection office or alternatively, Financial Consumer Agency of Canada (federal) may be able to point you in the right direction. Their website is here – http://bit.ly/JiNQ1n All the best to you, Jean!
I have the same issue with National Bank as Jean posted above on Jan 12, 2017. I am in BC. Can they still force me to acquire a lawyer or notary to complete the discharge?
Hi Donna, thank you for reaching out to us. We would like to look into this further. Would you be able to submit a complaint form on our website with more details? Here is the link to the online form. Thank you!
Hi, we have just paid off a line of credit and now they want to charge us 8000.00 above the balance we paid, we were told when we got the credit line there would be no other charges, that’s why we went with it. We live in B.C. is this allowed or do I need to dig out the original paperwork from years ago?
Hi Mary, if the bank you borrowed from is federally regulated, you can contact FCAC (Financial Consumer Agency of Canada). When you try to contact them, it will give you a list of institutions they regulate. Before you contact them, you may want to find the original paperwork/contract as they will probably ask for that as well. I hope this helps!