In this busy property market, it’s important to keep track of all the forms and paperwork necessary to buy and sell.

One of the most important documents, is called the release of a mortgage.

If you are selling your home, the bank which originally lent you the money will sign a document to release the mortgage from your property.

This form must then be registered with Titles Queensland for the mortgage to be officially released.

When a mortgage is registered by a bank, there is a document called a discharge authority form which is completed by the seller and submitted to the bank. This should be done as soon as the seller enters a contract of sale. 

Once the discharge authority form is processed by the bank, the bank will prepare the Release of Mortgage. This form is held by the bank until actual settlement occurs and in exchange for the Release of Mortgage, the seller provides the bank with their payout figure.

Once settlement occurs, the Release of Mortgage will be lodged with Titles Queensland and the mortgage will no longer show on the title when the buyer becomes the new owner.

If you do not organise for the release of the mortgage from the Title, you could run into some problems.

Firstly, the settlement could fall through as the buyer will not settle without the mortgage being released. Secondly, the seller’s bank may realise the seller is trying to sell the property without paying out its mortgage and lodge a caveat over the property to prevent the seller from being able to settle until they pay out the mortgage.

If you’re in the lucky position of being able to pay off your mortgage while retaining your home, you will still need to organise a release of the mortgage. 

Don’t assume you simply no longer have a mortgage and pop the form into a drawer somewhere. That form will still need to be lodged with the Titles office, even though the loan has been paid out in full.

Until the form is lodged correctly, the mortgage remains on the title. There have been cases where owners have tried to sell but have lost the release form. Titles forms change over the years and asking the bank to prepare a new one can be fraught with difficulty.

Homeowners have been unable to settle on the due date because they no longer had the original release of the mortgage that had been issued by the bank when their loan was finalised.

GLG Legal can advise you on every aspect of buying and selling a property, including ensuing your release of mortgage documents are lodged correctly. Make an appointment to see one of our property specialists today.