Mortgages are easily one of the most significant expenses you’ll make every month, so at some point, you’ll look for ways to reduce the amount to ease its financial burden. Remortgaging is a great way to do this, although it may involve a few extra steps you hadn’t anticipated, like the conveyancing process.
Conveyancing is the transfer of a property’s legal title from one person to another. The property’s ownership doesn’t necessarily change hands, but the lender’s interest in the property does, making it a critical process to account for when remortgaging. As such, you’ll need to consult with conveyancing solicitors to inspect a property’s title and legal standing to make sure the property provides enough security for the lender while formally recording the new interest.
Here’s what you need to know about conveyancing when remortgaging in 2021:
The Process of Remortgage Conveyancing
Even though you aren’t moving houses when remortgaging, you’ll still need to complete conveyancing on the new mortgage right away. The sooner it’s done, the faster you’ll benefit from the new interest rate, potentially saving you one or two payments at your previous rate. It also enables you to release any equity sooner, helping you avoid expensive interest payments when you repay other loans.
The Initial Stage
In the initial stages of this process, you’ll need to work with a solicitor after choosing a lender and a mortgage product. The solicitor will then send you a packet of documents stating their terms and conditions, a mortgage questionnaire, and an instruction form. They’ll also include a form relating to the leasehold, if applicable, requesting the freeholder or landlord’s details. The solicitor will also verify your identity, which you can do by providing them with a copy of your passport or driving licence. Then, the solicitor will acquire title deeds from the HM Land of Registry. If you are getting a new mortgage from a different lender, the solicitor will carry out a mortgage valuation to authenticate the security and ensure enough to protect the lender’s interest.
After Receiving the Offer
Your lender will course your mortgage offer through your solicitor, who will apply for search insurance or searches upon receipt. The offer will confirm whether the lender accepts search insurance or not, as some lenders require a complete pack of searches, including a local authority search. The solicitor will then coordinate with the lender for an initial redemption statement, which declares the amount it will cost to repay the old mortgage. The two will agree on a completion date, and your solicitor will work with you to ensure that you comply with the lender’s lending criteria. Once everything has been verified, the solicitor will send you the mortgage deed to sign. Afterwards, they will request the funds from the lender.
In this stage, the redemption figure will be reconfirmed, and your original mortgage will be redeemed. The remaining balance will be forwarded to you. The lender’s interest will be sent to the land registry through a charge, which means that if you sell the property, you’ll have paid off the mortgage entirely before receiving the proceeds. Lastly, the lender will confirm the monthly payment amounts and dates with you.
Why You Need a Conveyancing Solicitor’s Help
Most people remortgage to reduce their monthly payments, although you have to ensure that the savings you’ll receive from it far outweigh the costs associated with taking a new mortgage. These include early redemption fees, valuation fees, and broker costs. You may also have to pay legal fees, particularly if you’re simply borrowing more on your existing mortgage with your current lender. Still, a conveyancing solicitor will assist you with the legal aspect of taking on a new mortgage, which is often a confusing process, making their help essential.
Sometimes, lenders include a free legal package in their remortgage deals, which means a conveyancing solicitor of their choosing will help with the legal requirements. Nevertheless, you’ll need to read the fine print to make sure it is actually free. Otherwise, inquire if you’re free to select your own solicitor.
There are other situations in which a conveyancing solicitor will step in to help. If you hope to add a friend or partner to your new mortgage, you’ll need to hire a solicitor since you’ll be changing the property’s ownership, known as a transfer of equity. The solicitor will amend the deeds and help you with the legal documents that detail how you own the property. The same applies to removing someone from a mortgage since the property’s ownership will change.
The Role of a Conveyancing Solicitor
The conveyancing involved won’t be as complicated as when you purchased the property, but it will still involve significant effort. Your solicitor will take care of ID checks, leasehold checks, property searches, valuation, and many other details that can confuse someone who isn’t used to such documents. They’ll ensure that everything you’re doing complies with the law, identifying problems before they complicate matters. Doing all the legal legwork by yourself is an incredibly exhausting process, especially if you aren’t familiar with it, so it’s best to entrust all legal aspects to a professional.
Dealing with property deeds can also throw a wrench into your remortgaging, so solicitors will complete a priority search at the Land Registry to avoid this. Doing this will ensure that nothing has changed on these deeds since you began the remortgaging process. They will also take care of registering changes with the Land Registry once your previous lender has discharged their mortgage.
Remortgaging is often quicker when done with the same lender, but otherwise, it takes one to two months. Hiring a conveyancing solicitor will speed up the process and prevent you from falling into legal pitfalls, helping you enjoy more savings on your new mortgage and eliminating potential headaches. By using our guide, you can start the conveyancing process when remortgaging with more confidence.
Conveyancing Calculator offers the best value conveyancing in the UK. Whether you’re moving houses, buying a new property, selling one, or remortgaging, our conveyancing fees calculator will offer you instant prices straight from a UK-regulated conveyancing solicitor. Contact us today to learn more about how we can help you in the conveyancing process of remortgaging!