If you’re remortgaging with a new mortgage lender, it’s likely you’ll need a conveyancing solicitor to help with the transfer. This is a legal process and isn’t the same as simply switching to a new mortgage offer with the same lender.
What is remortgaging?
Remortgaging can be confusing. It doesn’t mean that you move home or take out an extra mortgage on your property. It simply means transferring your mortgage to a new mortgage provider.
Remortgaging is a legal process because the deeds and ownership records for the property will sit with a new lender. This means you need a conveyancing solicitor. If you are simply renewing a fixed rate with the same lender, you will not usually need legal advice.
When you remortgage, the debt you owe switches to a new lender. That lender will then hold the deeds to your property. Your conveyancing solicitor will register the change with the Land Registry and update the deeds.
What are the advantages of remortgaging?
People often switch mortgage providers when they come to the end of a fixed-rate period. Most mortgages come with an introductory rate that usually lasts between one and five years. After that, the interest rate often moves to a variable rate, which can be more expensive. For a better deal, it may be worth switching to a new lender at the end of your fixed term.
Are there downsides to remortgaging?
If you’ve nearly finished paying off your mortgage, you may not get as much financial benefit from switching. This is because any savings on a new rate can be offset by the cost of legal advice and related fees.
Remortgaging with a new lender is a legal process. This means you’ll need a conveyancing solicitor, a valuation, and there may be other costs involved. If you’re leaving your current lender before the end of your fixed-rate term, you may also have to pay an early repayment charge.
How should you proceed with a remortgage?
You don’t need to wait until the end of your fixed-rate term to switch to a new lender. There are lots of mortgage deals available, and it may be worth changing sooner. Work out how much any early exit fee might be compared with the savings you could make.
It helps to look at the fixed-rate mortgages available on the high street to get a sense of the market. You could then speak to a mortgage adviser or broker to explore your options and understand what they would mean for your monthly repayments. A broker can help with affordability checks, explain repayment comparisons with your current mortgage, and go through any arrangement fees. You may also want to check your credit score before starting the process.
Once you have decided to remortgage, you will need to instruct a solicitor to liaise with the lender. When choosing a legal service provider, look at reviews and compare costs. You want a solicitor who is experienced in working with mortgage brokers and confident in handling remortgages.
What does a conveyancing solicitor do when remortgaging?
Your conveyancing solicitor and lender will need to communicate and confirm that the mortgage product you’ve selected is appropriate. Your solicitor will then handle the legal paperwork needed to transfer your deeds to the new mortgage. It’s similar to the work carried out when you bought the property, but it is usually simpler.
Solicitors also need to register the redemption of the existing mortgage and the new mortgage with the Land Registry.
Many of the same legal processes apply as when you bought the property. A solicitor will check your ID, consider valuations and searches, and review the Land Registry records. Your new lender may require extra checks, which your solicitor will deal with.
This is based on the idea that you are remortgaging on the same terms, with the same people named on the mortgage. If you are adding someone to the deeds or removing someone, it is treated as a transfer of equity. This would be slightly more complicated.
