How does the remortgage process work?
Property Solicitor, Lesley Warren, answers some frequently asked questions regarding how the remortgage process works.
What is remortgaging?
Put simply, remortgaging is when you look to move your mortgage debt from one mortgage lender to another. Usually this is done to achieve a better rate of interest or to withdraw equity from the property.
What is involved in the remortgage process?
Find the right deal
It is important you consider your wider financial situation now and in the coming years. A mortgage broker or financial advisor can help you do this and search the marketplace for the mortgage deal that is right for you.
Apply for the mortgage
You will be asked to supply ID, personal and financial information at this stage. Ensure you have ID, proof of earnings, and details of monthly outgoings (including loans and credit card liabilities) to hand. The new lender will complete a credit check to confirm your financial position.
Assuming the new lender is satisfied with your financial position, the next stage will be the valuation. Some lenders will cover the valuation fee. If yours does not you will be asked to pay the fee at this stage.
The valuation is conducted for the lender’s benefit and will confirm how much your property is worth. There are three types of valuation:
- Desktop valuations which use information available online (such as data about the price you paid for the property and property values the immediate vicinity)
- Drive-by valuations where no one steps foot in your property
- Full valuations where a valuer attends the property.
A full valuation may be preferable if your property is different from neighbouring properties or if you have carried out a lot of improvements since you purchased. I fall into the home improver category and having recently remortgaged myself I was surprised that the desktop valuation was £45,000 lower than the full valuation.
If you have a preference as to the type of valuation I recommend speaking to your broker when deciding which produce is right for you.
Mortgage offer issued
Assuming the lender is happy with the valuation, you will be asked to pay the arrangement fee (unless you are adding it to the mortgage debt). The mortgage offer will then be issued to you and your chosen legal advisor.
Choosing your legal advisor
Most high street lenders now offer “free legals”. You do not have to use the banks recommended solicitor and some lenders even offer cashback if you appoint your own solicitor.
When I remortgaged recently I used the free legal service. Mainly because I was curious! I have concluded that it is worth choosing your own solicitor and paying a little bit more for the following reasons:
- Communication between you and the lender’s solicitor will be very limited. They have a large volume of matters on and simply won’t have time to speak to you in person.
- You will be charged for “extras” such as CHAPS fees (where money is due to you on completion) fees for verifying funds (where you need to pay money to reduce your borrowing) and fees for confirming registration of the mortgage etc.
- There are conveyancing issues specific to Bristol properties such as rent charge and underground coal seams. Our local expertise will allow us to deal with these issues to a lender’s satisfaction quickly
In brief terms, your legal advisor will check the title to the property, explain the terms of the mortgage to you, check and comply with the lender’s conditions, handle completion and update your title at the Land Registry.
How long does the remortgage process take?
From receiving the mortgage offer, it typically takes 4-6 weeks to complete the legal work. It may take slightly longer if your chosen lender requires searches or if the property is leasehold and information is needed from the Landlord.
You do not need to wait until an offer is issued to appoint your advisor. We can carry out the bulk of our work whilst the lender is arranging the valuation which may allow us to complete more quickly once the mortgage offer is issued.
Why choose GL Law for your remortgage?
- Our property team offer a blend of expertise, local knowledge and excellent customer service allowing us to offer a service unrivalled by the law firms handling “free legals” remortgages.
- We are approved to act for all major mortgage lenders in England and Wales.
- We can recommend mortgage brokers and financial advisors.
- We work on a fixed fee basis to avoid any unpleasant surprises.
Specialist legal advice for residential landlords
If you are thinking about remortgaging your property, then our residential property team can help you. Please get in touch by calling 0117 906 9400 or email firstname.lastname@example.org. Alternatively, please complete our contact form.