How to Remortgage
Remortgaging doesn’t have to be a complicated process – here at Bonallack & Bishop, our specialist conveyancing solicitors will carry out all the arrangements as efficiently and quickly as possible.
If you wish to take out a second mortgage, change your mortgage with your current mortgage provider or simply switch provider to get a better deal,it does not need to be a complex process. But as it involves some legal work, you will need to appoint a solicitor for your remortgage, even if your new loan is with your existing lender. Our experienced conveyancing team can offer comprehensive advice on the legal aspects of any remortgage of your property.
Looking to remortgage? Call our specialist solicitors on FREEPHONE 0800 1404544 for a FREE no strings attached quote.
Our 20 strong Conveyancing team handle remortgage transactions not only locally in Wiltshire, Hampshire, Somerset, Dorset but throughout England and Wales from our offices in Salisbury, Fordingbridge, Amesbury and Andover.
Click here to read more about how our conveyancing solicitors can help you.
If you’re looking to refinance an investment property, click here to found out how our specialist property investor team can help you
Do I need a solicitor to remortgage?
That depends on how you are remortgaging.
If you choose to stay with your current lender and switch to a new rate or deal, it’s called a “product transfer” and doesn’t require any additional legal work, because technically it’s not a remortgage.
However, if you decide to switch to a new lender, you will need to hire a solicitor or conveyancer to assist with the legal aspects of the remortgage process. And similarly if you’re adding perhaps a new partner or co-habitee to an existing mortgage, or removing an owner from the property following divorce, that will also mean that you are going to need a solicitor.
Your remortgage – what you should do
Timing is often very important when you remortgage. So don’t wait for your mortgage offer before you instruct your solicitor. Do it straight after you submit your remortgage application. The earlier you instruct us, the sooner our property solicitors can get started on your remortgage.
Our experienced property team regularly handle remortgages both locally in Wiltshire, Hampshire and Dorset and throughout England and Wales – from our offices in Salisbury, Fordingbridge, Andover and Amesbury.
Remortgaging – your first steps
It’s often worth considering instructing a broker or independent financial advisor before approaching a lender directly for the mortgage. They will be able to search the market for you and find the best deal. Although it may seem simple, it is sometimes not the best option to re-mortgage with your current lender.
The next step is making an application with your chosen lender. If you have decided on an endowment based mortgage then you will have to make an application for an endowment policy with an insurer. An experienced broker or independent financial adviser can give you more advice on taking this option.
Your lender will request a fee in order to conduct a valuation and/or survey on your property. Whilst your property is undertaking a valuation and/or surveyors report your lender will also be seeking financial references for you. It is likely that the lender will ask you for the details of your solicitors so that they can deal with them directly.
Make sure that you choose a conveyancing solicitor with regular experience of remortgage work – to ensure your remortgage completes swiftly and efficiently. We are accredited members of the Law Society’s Conveyancing Quality Scheme (CQS) – the essential panel for quality residential conveyancing law firms. So you can reassure that the quality of our conveyancing work been independently assessed and approved
And don’t forget that your bank or building society will allow you to choose your own solicitor. Our conveyancing solicitors have the experience you need and can act for both you and your lender to avoid doubling up work as well as dealing with discharging your existing mortgage.
Valuation and survey?
Be aware that the enquiries necessary on a remortgage are as extensive as those on buying a property in the first place – and your new lender may require an up to date valuation of your home – instructing surveyors approved by your new lenders is usually the most practical way to get a remortgage property valuation.
If you haven’t arranged your remortgage yet, don’t forget that we have close links with local Independent Financial Advisors who help you find the right lender. We are happy to reduce you to one of the IFA’s who we work regularly with – just give us a call.
Remortgaging – What your Solicitor will do
When you have your remortgage offer, return any signed documents that your lender requires immediately. Your lender then sends the legal paperwork to us. Then our solicitors:
- Conduct ID checks
- Check the terms and conditions of the remortgage offer to see if there are any particular or unusual requirements(special conditions), for example if your lender needs certain building work completed before releasing the mortgage funds.
- Check your title deeds to ensure they are in order and confirm that to your mortgage company.
- If the property is leasehold house or flat, your solicitor will also:
- ensure your service charge and ground rent are paid up to date
- check that your lender is happy with the terms of your lease
- Check the terms and conditions of the remortgage offer to see if there are any particular or unusual requirements(special conditions), for example if your lender needs certain building work completed
- Carry out a local property search if required by your lender. It is likely that your solicitors will need to treat the re-mortgage like a normal mortgage application and will therefore conduct local authority/land charges searches on the property and check that the deeds are all in order. This information is used to submit a report on the title of the property to the new lender and advise if there are any special conditions needed or any adverse entries have been made since you acquired the property.
- Forward a report on title’ to your lender indicating if there are any problems with your title deeds and dealing with any special conditions.
- Consider the terms of your mortgage offer and ensure that you understand it
- Prepare the documents your lender will need you to sign and arrange signature of these by you.
- Conduct a bankruptcy search for each borrower to confirm to your Lender that you have not gone bankrupt. We also carry out a land charges search against your property to make sure that that all no adverse entries on the register.
- Get confirmation from you of the date when you want to complete your re-mortgage and get hold of the redemption figure (i.e. the sum required to pay off your existing mortgage) from your current mortgage company. That mortgage redemption statement will also detail any early repayment charges or exit fees that apply
- Complete Certificate on Title which is used to identify the current owner of the property and its status.
- Our mortgage lawyers then request your mortgage advance in sufficient time for completion.
- Draw down your new mortgage funds
- Pay off your old mortgage
- Register the details of the new mortgage at HM Land Registry
- Confirm to you once the registration is complete
- Once all this is completed, we return the title deeds to your new mortgage company.
As you can see from the above the lion’s share of the work is conducted by your solicitor, therefore it is really important that you instruct an experienced conveyancing solicitor to deal with your case.
A Guide to Different Mortgages
With so many different types of mortgages on offer, it can be difficult to choose the right one. This easy guide should help explain some of the mortgages on offer but it is by no means an exhaustive list. Other popular mortgages such as flexible packages, discounted rates, capped rates or cashback deals may be well suited to your situation.
Shared ownership or shared equity schemes
These schemes enable you to purchase part of the value of the property whilst a housing association puts up the equity for the remainder. You then rent their share of the property and after a certain number of years, you will gain the right to buy out the housing associations share in the property. These kind of mortgages are also available for what is known as “staircasing” i.e. the process by which you gradually purchase a larger share in your shared ownership home
Click here to read more about shared ownership conveyancing.
Repayment mortgages are paid off in instalments each month, plus interest.
The monthly payments in interest only mortgages solely cover interest. After a specified period of time, you must pay off the mortgage itself. Buy-to-let investors and first time buyers are often attracted to these mortgages because of the low monthly costs.
Homeowners, generally save money each month in the form of pension contributions or ISA savings for example, in order to pay off the mortgage at the end of the term.
These are generally offered at the start of a repayment mortgage and often last for up to 5 years. When the specified term is up, borrowers usually switch to a variable rate mortgage with the same lender.
Currently, with interest rates so low, the Standard Variable Rate (SVR) is often lower than the fixed rate. However, this will change as the economy recovers.
It is important to check the following when considering a fixed rate mortgage:
• What the charges are for paying your mortgage of early
• Charges relating to money transfer and valuation
• Other administrative fees
Borrowers who have been on a fixed rate mortgage generally switch to a variable rate when their fixed term expires. Each year, the SVR is recalculated and it can go up or down. Borrowers’ monthly charges will be pinned to this rate.
These work in much the same way as variable rate mortgages, however instead of monthly payments being pinned to the lender SVR, they are tracked at a certain percentage above another organisation’s base rate, like the Bank of England for example. They will continue to follow this rate for a specified period.
Top tips on securing your mortgage or remortgage
• Ensure that you are prepared with all the relevant paperwork before applying for your remortgage. You will be able to check what paperwork is required with a lender.
• Check your credit rating.
• Protect your credit rating by avoiding running debts on credit cards and loans.
• Leave any applications for credit until after your mortgage is obtained.
• Keep hold of any P60s and payslips
• Make sure you are on the electoral roll
Can I remortgage to pay off other debts?
Yes, that’s normally okay – and you may find that your mortgage loan interest is lower than and the interest rate on other loans (e.g. credit card).
Will I need to remortgage if I move home?
That depends on your mortgage and your lender. Some mortgages are portable – i.e. you can simply transfer your existing mortgage loan them to your new home.
Looking for the right Solicitor to help with your Remortgaging? Call Us Now
For a stress-free purchase make sure you choose a local conveyancing specialist.