News & insights
The not so simple process of remortgaging your new home
27th October 2017
When looking to make expensive home improvements, if the cash isn’t readily available, remortgaging the property might be an option. But it is often forgotten that there are various checks and searches that will need to be carried out, as well as other legal and financial details that need to be handled correctly.
This process is referred to as conveyancing, it is the same process as when buying a property, and will normally be carried out by a qualified conveyancing professional.
So what is involved in conveyancing for remortgaging? There are various steps involved in the remortgaging process that a conveyancing solicitor or licensed conveyancer can take care of.
This includes identity verification, money laundering checks, checking the title deed and property searches e.g. checking for any planning, building control or environmental issues affecting your property. A new mortgage lender will need to see evidence of these checks before releasing funds.
Conveyancer will give the existing mortgage lender notice that the intention it to pay off the outstanding balance on the mortgage and ask for a redemption statement, which details how much is owed, plus any penalties, exit fees or other costs for early repayment.
When the new mortgage lender has carried out a valuation of the property, they will make a formal remortgage offer and send a copy of this to both the property owner and the conveyancer. The conveyancer will talk through the details of this offer with the owner to make sure it is clear what is being agreed to.
When the funds are ready to be transferred, these will be sent to the chosen conveyancing professional. They will then use the funds to pay off the old mortgage and any fees, then deposit any balance left over into a nominated account.
Once the old mortgage lender confirms that the previous mortgage is paid off, the solicitor or licensed conveyancer will contact the Land Registry and have them update the title deed for the property with details of the new lender.
The conveyancing process for remortgaging a leasehold property involves a few additional steps which a conveyancing solicitor or licensed conveyancer can assist with.
Firstly, they will need to check that the length of time remaining on the lease meets the new mortgage lender’s requirements. Many lenders will be reluctant to offer a mortgage on a leasehold property with 80 years or fewer left on the lease.
The conveyancer will also need to collect details of any service charges and ground rent from the landlord or agents, as well as a copy of the property’s buildings insurance documents.
A copy of the lease will need to be provided to the new mortgage lender. If a copy of the lease is not available one can br request one from the Land Registry.
So unfortunately it isn’t as simple as approaching a lender to remortgage your home, there is a lot to take into consideration, and seeking professional advice before making any decisions might be the best option.
Please note: This article is intended as guidance only. No responsibility for loss occasioned/costs arising as a result of any act/failure to act on the basis of this article can be accepted by Latimer Hinks. In addition, no responsibility for loss occasioned/costs arising as a result of any act/failure to act on the basis of this article can be accepted by the firm.
Martin Williamson
