There are a lot of reasons why you may need to remortgage your home or buy-to-let property. It could be to free up equity for an extension, settle unsecured debts or even simply secure a better mortgage interest rate.
Homeowners who are coming towards the end of their fixed period will have received a letter from their solicitor stating such and this letter would include the interest rate that they will be moving onto along with their new monthly payment.
Generally, this is higher than they would have been paying during their fixed period and remortgaging will give the opportunity to move into a more favourable rate either due to lower priced products being available, a decreased loan to value (smaller loan compared to the value of the property) or a combination of both.
So, how does the remortgage proceed work and how long does it take? Well, the good news is that it is faster when you purchased the property as the key objective is to satisfy the requests of the new lender (unlike the lender and solicitor when purchasing a property).
Remortgaging can take a couple of weeks once you have received your mortgage offer and the process follows a basic five step process. We have outlined this below.
- Speak with your broker
The first place to start should be a conversation with your mortgage broker. Our team will be able to advise on the most suitable mortgage product, what your payments are likely to be and also the process moving forwards.
- Find a solicitor (if required), ID and title checks
Following step one, you will need to source a solicitor to complete the basic level conveyancing that is required for your remortgage.
Some lenders have their own panel of solicitors, and your broker should be able to recommend someone if you need some direction. The FCA does not regulate solicitors.
Your solicitor will carry out the relevant ID checks and review the title deed to check you are the legal owner of the property and whether there are any charges or restrictions that need satisfying.
If the property is a leasehold, the solicitor will review the covenants within the lease to confirm who they need to serve notices on to confirm about the changes made. They will also confirm that the title is compliant in accordance with the Council for Mortgage Lenders handbook.
- Mortgage offer and request current mortgage statement
Where there is an existing charge, the solicitor will request for the current lender to provide a mortgage statement so they can discharge the balance on completion.
If you are releasing funds from the property, this statement will also confirm the balance to be paid to you on completion.
- Completion
Just prior to completion, your solicitor will carry out a bankruptcy search. Once they are satisfied, your solicitor will set a date for completion and request the funds from the new lender.
When the mortgage advance has been received, your solicitor will redeem your existing mortgage, settle their invoice and any disbursements then repay the balance (if any) to you.
- Update land registry post completion
When your mortgage has completed, your solicitor will update details with the land registry. This process can take anything up to six months for freehold properties or longer for leasehold properties.
After this, your remortgage will be complete!
If you are purchasing a property and have any questions, then we will be more than happy to help where we can. You can either call us on 01322 553282 or contact us online.