Remortgaging is the process whereby a homeowner with an existing mortgage changes to a new mortgage product, either with their existing lender or by moving to a different bank or building society.
There are many different reasons why a property owner may decide to remortgage. They could be seeking to release equity in order to invest elsewhere, to gain security by way of a fixed rate mortgage when their existing mortgage is on a variable or tracker rate, or because they have found a better mortgage rate elsewhere compared to the one they are currently on. You will need to instruct a solicitor to help you complete the remortgaging process, in order to satisfy your mortgage lender’s requirements and to negotiate the complicated legal work involved in this.
The remortgaging process
The remortgaging process will often be completed more quickly than when you bought your home, provided that you can satisfy the requirements of your new mortgage lender. There will not be the same requirement for your conveyancing solicitor to raise legal inquiries and investigate the legal title, as this work will have been completed at the time of the initial purchase. Once you have received a new mortgage offer, a remortgage can often be completed within a matter of weeks. However, there can be restrictions and charges that can prevent the property being registered with the new mortgage interest, and it is important that these are investigated thoroughly. There are a number of steps in the remortgaging conveyancing process that must be completed carefully to ensure that your remortgage will be approved without any unnecessary delays.
Once you have instructed a solicitor they will request some information necessary for them to be able to take instructions from you, as well as carry out identification checks. You will need to provide your solicitor with identification documents to allow them to satisfy the nationally enforced Money Laundering Regulations, and they will need details about your existing mortgage so they can access the deeds to your property. If you are planning to pay off some of your mortgage and remortgage for a lower amount, your solicitor will need to see evidence of the source of the funds that will be used to pay this off. Again, this is to satisfy the Money Laundering Regulations.
When your solicitor has completed their checks and received all necessary information, they will be able to begin carrying out legal checks in relation to the property itself. Your solicitor will make an application to your existing mortgage lender for the deeds to the property, which will have been held by it since you took out your current mortgage. They will also contact the Land Registry for details of the property, known as the title. These documents provide confirmation that you are the legal owner, as well as other information such as a plan of the property and a list of any charges registered against it.
Checking search results
In some cases your solicitor will be required to carry out searches in relation to your house to confirm that there is nothing about the property that could affect the lender’s decision to grant you a mortgage. These searches will have been carried out when you bought the house and will cover issues such as compliance with building regulations, any prospective local authority works to be carried out in the area, and environmental issues such as land contamination or flooding risk. Because these searches have already been carried out, whether they require to be carried out again will be at the discretion of your lender. In many cases, lenders will accept search indemnity insurance instead of requiring searches to be conducted again. Your solicitor will check with your lender what its requirements are in relation to searches.
Checking your mortgage offer
Your mortgage lender will then make a mortgage offer to your solicitor. Your solicitor will check this, ensuring that your property has been valued accurately and that all necessary conditions have been met. They will discuss the offer with you to make sure that you are fully aware of the conditions attached to your new mortgage, how much you are borrowing, the rate at which you must repay this and any other requirements that you will have to meet. If you have a mortgage outstanding on your home, your solicitor will contact your current mortgage provider for an up-to-date statement so that this can be discharged on completion.
Signing documents and requesting funds
Once the mortgage offer, title documents and search results have been received, your solicitor will make arrangements for you to sign your new mortgage paperwork. They will begin the process of completion, agreeing a date for completion and requesting funds so that the outstanding balance on your previous mortgage can be paid off. Further checks will be carried out at this stage, checking with the Land Registry that no new entries have been made in relation to the property and placing a freeze on the title to prevent any other charges being applied to it. They will also carry out a bankruptcy check on you through a Land Charges search. These checks should take around five to seven days to complete.
On the day of completion your solicitor will pay off your outstanding mortgage and settle any other costs payable. Any outstanding balance will be repaid to you.
Following completion, your solicitor will register the new mortgage in the Land Register. Before this can be done they will need to provide proof that that your previous mortgage has been repaid in full. Confirmation of this will be provided to your solicitor by your previous mortgage when your outstanding mortgage has been redeemed. Registration of your new mortgage must take place within two months of the date of completion. Once registration has been completed, your solicitor will forward the title deeds to your new lender and the balance documents will be sent to you.