We also have a detailed article explaining how to effectively complain about your solicitor if you feel they have treated you unfairly.
When is remortgaging considered?
The decision to remortgage can be driven by changes in personal circumstances, shifts in interest rates, or reaching the end of an existing mortgage term.
Remortgage process in the UK
The remortgage process in the UK begins with evaluating your current mortgage and exploring new mortgage deals.
This involves obtaining a redemption statement from your existing lender and considering offers from mortgage lenders.
Key steps include applying for a new mortgage, undergoing property valuation, and ensuring all legal documents are in order.
The process culminates in transferring the legal title from the existing mortgage to the new one, a step often facilitated by a conveyancing solicitor.
Read more about how long the remortgage process takes in the UK.
Conveyancing solicitor's role in remortgaging
Key responsibilities
A conveyancing solicitor plays a multifaceted role in the remortgaging process. Their responsibilities encompass a range of legal tasks.
Firstly, they examine the mortgage offer to ensure all terms are fair and legal. This includes verifying the mortgage deed's correctness, an important document outlining the agreement between you and the new lender.
The solicitor also liaises with the current lender to obtain the redemption statement. This statement details the amount needed to pay off your existing mortgage, including any early repayment charges.
In the remortgaging journey, your solicitor represents your interests. They communicate with the new lender and manage the legal work involved in transferring the mortgage. This involves preparing and sending the new mortgage deed to the Land Registry for registration.
The Land Registry holds records of all registered properties in the UK, and updating this with your new mortgage details is important.
The conveyancing solicitor performs necessary searches, like bankruptcy searches, to satisfy the new lender's requirements. They ensure all legal requirements are met, safeguarding you from any legal pitfalls.
We also have a detailed article on remortgaging a buy to let property.
Legal requirements for a UK remortgage
The legal requirements for a UK remortgage involve several legal steps and documentation that must comply with UK law.
A main legal aspect is the transfer of the mortgage deed. This is the formal agreement between you and the new lender. The deed must be correctly drafted, signed, and registered at the Land Registry.
In cases where a different lender is involved, the new mortgage terms might differ from your current deal.
Legal guidance ensures you're aware of any changes, such as variations in monthly repayments or the interest rate. Your solicitor checks for any clauses in your current mortgage that might affect the remortgage, such as early repayment charges.
Another legal requirement is the discharge of the existing mortgage. Your solicitor ensures that the mortgage funds from the new lender are used to pay off the existing mortgage in full. This process involves a detailed financial settlement, where every penny is accounted for.
In remortgaging, property title verification is also essential. The solicitor checks the title deeds to ensure there are no legal issues that could affect the new mortgage. They conduct property searches, similar to those done during a property purchase, to uncover any legal impediments.
Lastly, if your property is leasehold, leasehold checks are necessary. These checks confirm the lease's validity and any terms that might impact the remortgage.
Do you need a solicitor to remortgage with the same lender?
Pros and cons of remortgaging with your current lender
Remortgaging with your current lender offers both benefits and drawbacks.
On the plus side, staying with the same lender can streamline the process, often resulting in fewer administrative tasks. You might avoid some of the remortgaging fees encountered when switching lenders.
However, this doesn't always mean it's the most cost-effective option. Your current lender's deal may not be the most competitive on the market and may lead you to miss out on better interest rates offered by other lenders.
When a solicitor is not required: internal remortgages explained
In certain internal remortgaging scenarios, a solicitor's services are not always necessary. This is particularly true when you opt for a product transfer with your current lender, switching to a new mortgage deal while staying with the same institution.
Since there's no change in the lender, and the property title remains unchanged, the legal workload is significantly reduced.
However, note that while a solicitor might not be required, seeking mortgage advice to ensure you're getting the best deal remains a wise decision.
Choosing between a new and current mortgage lender
The need for a solicitor when switching lenders
When deciding to switch to a new mortgage lender, the need for a solicitor often arises. This is because changing lenders involves more complex legal processes, including the transfer of the property title from one lender to another.
Conveyancing solicitors play a central role here, handling all the paperwork and ensuring legal compliance.
While this might add to the remortgaging fees, the expertise of a solicitor can safeguard against legal pitfalls.
Comparing mortgage deals: new lender vs current lender
You must compare mortgage deals between your current and new lender.
Each lender offers some benefits, with new lenders usually providing more attractive interest rates or terms that could save money in the long run.
Conversely, your current lender might offer a more straightforward process and lower fees for a product transfer.
Weigh these options, considering factors like the lender's standard variable rate, arrangement fee, and any early repayment charges.
Legal fees and other expenses
Breakdown of legal fees in the remortgaging process
Legal fees in remortgaging cover the solicitor's work in transferring the mortgage. They vary based on the complexity and the solicitor's rates. Tasks include reviewing mortgage terms and conducting searches.
Can legal fees be added to your remortgage?
Legal fees may be included in some mortgage lenders' remortgage packages, often as "free legals." However, these costs might be built into the mortgage. Choosing your own solicitor usually means paying these fees upfront.
Additional costs: valuation fees, exit fees, etc.
Additional remortgaging costs include valuation fees for assessing property value, exit fees from your current lender, and booking fees for new mortgage deals. It's important to factor in these expenses.
Mortgage deeds and property deeds
Mortgage deeds and remortgaging
Mortgage deeds bind you to your new mortgage terms. They outline your obligations and are required by most lenders to secure the loan.
Handling property deeds
Handling property deeds involves transferring them between lenders. This process requires legal expertise to ensure accuracy and legality. Mistakes can lead to significant issues, highlighting the need for a solicitor.