We’ve cleared our mortgage but bank is holding on to deeds

We have just cleared off our home loan but Ulster Bank says we can’t have deeds as we took out a loan with our daughter 10 years ago on a investment property with the three names on the loan.

We owe €154,000 on the apartment and it’s worth €275,000.

At the time we did not realise that the house was being used as a guarantor. Can they legally keep these deeds as the apartment is worth more than the loan on it?

Ms N.G., email

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Congratulations on clearing your home loan. That's always a landmark moment for mortgage holders – notwithstanding that it is the cheapest money you are ever likely to borrow. The security of knowing that your home is 100 per cent yours is a great comfort to homeowners.

But what about the deeds?

The situation will be determined fully by the wording of the contract you signed with Ulster Bank when you took out the loan with your daughter for the investment property. And the only way of checking that is by reading your copy of that mortgage contract.

Either your home was used as security on the investment property mortgage, in which case the bank is absolutely correct, or it wasn’t, in which case you are entitled to your deeds.

Unless you are looking to sell your current home, you will have to find somewhere secure to store your deeds

You say the investment mortgage was taken out by you and your daughter 10 years ago. That was in 2008/09, right at the outset of the gathering storm that was the financial crash.

Lenders had already been adopting a more cautious approach.

I would not be at all surprised that a bank would have sought additional security where it was readily available for an investment loan – especially where one of the parties to the loan was a novice borrower, if that was the case.

But the truth is readily available in the mortgage contract. Have a look there.

One other point to consider is whether you should be in any rush to be getting hold of the deeds.

Unless you are looking to sell your current home, you will have to find somewhere secure to store your deeds. In the old days, your bank used to do this but I don’t think any of them offer that service these days. That really means you storing the deeds with your solicitor or in a safety deposit box – both options that are likely to carry a financial charge.

In the absence of any plans to sell or transfer ownership of the house, your deeds are probably as safe with Ulster Bank as anywhere else.

Of course, if you do want to sell your current home and the deeds are still being held by the bank as security on a loan, you would need to get its permission for any sale, or transfer.

[ dcoyle@irishtimes.com ]