Remortgaging is a good option for people looking for a lower interest rate or a more competitive product, who want to consolidate short-term debts into their mortgage repayments, or release equity to finance another purchase such as a car, holiday or rental investment. But is a conveyancer essential for a remortgage?
Let’s say that the fixed interest deal on your existing mortgage is about to come to an end. After looking at the deals on the market, you might decide to switch over to a fresh agreement with your current lender. This is known as a “product transfer” and doesn’t normally need a conveyancing solicitor to set up.
But what if the best deal is with a different bank? Signing up with a new mortgage provider involves certain additional steps, including making sure your old mortgage is repaid and replaced by the new one and updating the records with the Land Registry, so the new lender’s interest in the property is documented. The new lender may also insist on certain formal enquiries to ensure that the property represents good security for the amount you are borrowing.
Other instances include adding an owner to the mortgage. This remortgage is known as a Transfer of Equity; thus, the conveyancing solicitor must draw up the ownership documentation and amend the deeds. On the other hand, an owner may be removed from the ownership in the case of a relationship separation when a co-owner moves out or if you want to remortgage a rental property as a sole landlord.
All of this is known as the remortgaging process. A conveyancing solicitor is a must for making sure everything is processed correctly, and any new lender will insist on a conveyancer being appointed. Many lenders have their own panel of conveyancing firms. However, for a personal touch and the reassurance of knowing your interests are going to be properly represented, many homeowners prefer to choose their own solicitors.
The steps of remortgage conveyancing include the following:
Your conveyancer will ask you for proof of ID. They will also need to check the position on your current mortgage, which involves contacting your existing lender and getting a redemption statement. This statement sets out how much remains are owed on the mortgage, plus details of any penalties or exit fees for early repayment.
The conveyancer will handle any formal checks (searches) required by your new lender (see below). Land Registry priority searches will be carried out to look for anything unexpected on the property deeds that have changed.
There are a number of other searches that your conveyancer will need to complete. You can find out more about searches here.
The new lender will need to check that the amount you are borrowing is not more than the value of the property. For this, they’ll carry out a mortgage valuation (aka ‘valuation survey’). This may involve getting a surveyor to visit the property to do a short report. More likely, however, the survey will be compiled on the basis of sales data from your immediate area, along with a surveyor driving past the property. Once the mortgage valuation becomes available, you should receive your formal remortgage offer. Your conveyancer will check this over with you to make sure you are happy with the terms.
When everything is agreed upon, the funds from your new lender are sent through to your conveyancer. The conveyancer makes sure your old mortgage is paid off, along with any associated fees. If there is any balance left over – for instance, if you have arranged to unlock some of the value in the property – then this is paid into your account.
Your conveyancer contacts the Land Registry and asks them to update the deed for your property, replacing details of your old lender with those of your new one.
Your new lender will require your conveyancer to carry out certain formal checks (searches). This includes title checks to make sure that no one other than the declared owner(s) has a financial claim over the property. It may also include searches with the local authority and sometimes with other agencies to make sure there are no major issues that could affect the property’s value. Many lenders will accept a search indemnity as an alternative to ordering full searches, which is a quicker and lower-cost option.
For further information on this, you can explore our guide to conveyancing searches.
Just before completion, your conveyancer will carry out a bankruptcy search to show the lender that you are still in a financial position to borrow. They will also do a final title check to demonstrate that nothing has changed regarding ownership and interest in the property since the remortgage process started.
On the day of completion, your conveyancer will get the mortgage funds from your new lender, and they will then pay off your old mortgage (along with any outstanding fees) and send any remaining balance to you. Shortly afterwards, they will take care of Land Registry record updates and then you are all set up with your new mortgage.
The remortgage process can usually be completed within around 4 weeks of you receiving your mortgage offer from the lender. If you are remortgaging with the same lender, it is usually much quicker as they will already have your ID and financial records on file, allowing them to skip over a few of the verification steps.
It can be longer if the lender requires local authority searches to be completed, as some councils are currently experiencing delays in processing requests. If it looks as if there is going to be an especially long hold-up and if your new lender agrees, it may be possible to take out an insurance policy (indemnity) to allow you to proceed without waiting for the search and to cover you against the financial impact of unfavourable search results.
We suggest the OneSearch Express product in this regard, and alongside the indemnity, this includes a property data report that provides over 70% of the data normally obtained from local authorities for your conveyancer to review. A good conveyancer can make a big difference in keeping everything moving for you, such as ensuring all relevant paperwork is completed correctly and submitted promptly and chasing up and updating the various parties involved as and when required.
Remortgage legal fees are often around £850-£1500, but that depends on certain factors such as:
Additional fees to third parties, known as ‘disbursements’, include £20 to £910 in Land Registry charges, £2 in bankruptcy searches, £3 in priority searches and £3 to £12 to issue an official title copy. Again, this will vary depending on the lender and your conveyancer.
The good news is that most lenders will offer a remortgage deal that includes a free legal package, meaning their chosen conveyancing solicitor will cover the legal requirements. This can help to save you money and work out as being more affordable in the long run.
However, lenders that offer this don’t tend to use high-paying, good-quality solicitors, so progress may be significantly slower.
So, if you have the budget, it may be wise to shop around to find your own solicitor that offers a good deal. Solicitor fees for remortgage conveyancing are usually between £300 and £1,000. This is calculated on the valuation of the property, and whether it is a freehold or leasehold.
For a fast, proactive and highly competitive service from a Trustpilot Excellent-rated firm, you can get an instant remortgage conveyancing quote from Muve here.
For more insider info on what to expect from the conveyancing process, head on over to our Help and Advice page. You can also contact us or get a free quote.
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