When you remortgage a property, the legal title is transferred from the borrower to the lender. Even though the title of the property doesn't change hands, the lender's interest in the property - or even the lender themselves - may change. That's why it's important for a solicitor to check the title and legal standing of the property. This verifies that the property offers sufficient security for the lender and formally registers the new interest. This blog post will shed light on the remortgage conveyancing process.
The Remortgage Conveyancing Process: What You Need to Know
Remortgaging is a popular way of releasing equity and borrowing against the property. It works by increasing the amount of money the borrower can borrow against their home. This means they can use the money to pay off old debts, finance home improvements, or even fund a new home.
When you remortgage a property, there are a number of different factors to consider. Some lenders require you to switch your energy supplier and have a new standing order. Many lenders even insist on you using their solicitor for the remortgage conveyancing process. Luckily, we work with a number of different lenders, so we can help you find the best deal for you. We can also help with your remortgage conveyancing process and make sure everything is taken care of.
The Remortgage Conveyancing Process
The remortgage conveyancing process involves these main steps:
1 - Identity Verification
When you buy a property, lenders need to confirm your identity before they accept your offer. This is to make sure you're able to afford the mortgage. Lenders also need to verify that you're a genuine person who isn't trying to commit fraud. Under the Money Laundering Regulations, it's their responsibility to do this. The lender verifies your identity with either a fingerprint or a credit check.
2 - Checking the Source of Funds
Before the lender agrees to loan you the money, they will check the source of your funds. The lender needs to make sure that the borrower has the funds to cover the loan. This is to prevent them from getting into debt. The lender may also want to check that the borrower's income is stable and that they have a deposit.
3 - Checking HM Land Registry Title Deeds
The lender will need to check the title deeds and legal standing of the property. This will ensure the property is in good condition and that there are no outstanding debts on the property. This also prevents the lender from getting into debt. Title deeds will provide information about the property and the ownership history.
4 - Getting Legal Documents Ready
Once the lender is satisfied with the details, they will draw up the legal documents needed to transfer the loan. This will include:
- An offer of mortgage
- A mortgage deed
- An application form
- A set of standard terms and conditions
The borrower should read through the documents and make sure they understand them. If they're happy, they should sign the documents.
5 - Review Mortgage Order
The lender will send the legal documents to the borrower's solicitor. The solicitor will review the documents and make sure they're in order. They will then notify the lender in writing that the documents are accepted.
6 - Request for Current Mortgage Statement
The borrower will need to provide the lender with details of their current mortgage. This will help the lender work out how much money they can lend. For example, the lender will need to check the outstanding balance on loan and the outstanding term. If the borrower's current lender holds more than one mortgage, then the lender needs to confirm the percentage of each loan.
7 - Apply for Local Authority Searches
The lender needs to check that the property complies with all the current building and planning regulations. They will also check that the property doesn't have any outstanding debts. To do this, they will order two local authority searches. If they find anything suspicious, they will contact you to find out more information.
8 - OS1 Priority Search and Bankruptcy Check
The lender will check the property's status on the Open Register. This will confirm that the property is not subject to any recording orders. A local authority search won't tell you this. Although it's rare, you could find out that the property has entered into a mortgage agreement with a registered social landlord. The lender will then check the property on the Land Registry's Priority Search. This will make sure that the property details are correct and that there are no outstanding mortgages. The lender will also order a Bankruptcy Check. This will make sure there are no outstanding entries on the property's title.
9 - Send the Certificate of Title
Once the lender has approved the documents and checks, they will send them to the borrower's solicitor. The lender will also send a photocopy of the certificate of title to the borrower's solicitor. This confirms that the lender has a legal interest in the property.
10 - Completion
The borrower's solicitor will then tell the lender that the legal documents are ready for signing. The lender will then arrange for a solicitor, who acts for both the lender and the borrower, to undertake a 'conveyancing completion'. This will be held at the solicitor's office. At the completion, both the lender and the borrower will sign the legal documents and pay their fees. The borrower will pay their solicitor, and the lender will pay their solicitor.
11 - Post-Completion
Once the completion has been completed, the lender will send the borrower's solicitor a copy of the Certificate of Title. The borrower should keep this in a safe place. The borrower's solicitor will then hand over a copy of the remortgage conveyancing file. The lender is now responsible for the file. They will make sure the mortgage is registered on the Land Register. Once the mortgage is registered, the title will show that the lender has the legal title of the property.
How Long Does the Remortgaging Process Take?
There's no set time for the remortgage conveyancing process. Each lender has its own legal processes. Once all of the lender's checks have been completed, the lender will draw up their legal documents and send them to the solicitor. The purchaser will then need to provide the lender with their current mortgage statement. This will help the lender assess how much they can afford to lend. Once the lender has decided how much they can loan, they will send their legal documents to the borrower's solicitor. The borrower's solicitor will then assess the documents and confirm that they are in order. Once this has been completed, the legal documents will need to be signed by both the lender and the borrower. Once the documents have been signed, they need to be registered with the Land Registry. This will ensure the lender and the borrower have a legal right to the property.
The remortgage conveyancing process is a lot like buying a property. It's important to find a solicitor you can trust who has expertise in the property market. These professionals can help you find the best remortgage deal for you and make sure your conveyancing is handled responsibly.
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