What does a remortgage do?
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.
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 remortgage conveyancing firms you can use. However, for a personal touch and for the reassurance of knowing your interests are going to be properly represented, lots of homeowners prefer to choose their own solicitor.
What does a solicitor do for a remortgage?
The steps of remortgage conveyancing include the following:
ID and redemption checks
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).
Reviewing your mortgage offer
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, 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.
Updates the Land Registry
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.
Do you need searches when remortgaging?
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 remortgaging process started.
What happens on completion day for remortgage?
On the day your conveyancer gets the mortgage funds from your new lender, they will pay off your old mortgage (along with any fees) and then 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.
How long does a remortgage take?
The remortgage process can normally be completed within around 4 weeks of you receiving your mortgage offer from the lender. It can sometimes 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, by making sure all relevant paperwork is completed correctly and submitted promptly, and by chasing up and updating the various parties involved as and when required.
Remortgage solicitor fees
Solicitor fees for remortgage conveyancing are usually between £400 and £750. This is calculated on the valuation of the property, and whether it is a freehold or leasehold.
In addition, there will be costs payable to third parties, known as ‘disbursements’. Main ones tend to be Land Registry fees of between £20 and £250 depending on property value, and search fees of between £20 and £200.
For a fast, proactive and highly competitive service from a Tustpilot 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 knowledge hub. You can also meet our team or get in contact for a chat.