As a property owner, there may be a time when you want to replace your current mortgage or wish to borrow money against your property.
Make sure you remortgage for the correct reasons and you have searched for the best mortgage product that is suitable to your circumstances even if you stay with your existing lender. You will normally need a solicitor or conveyancer to deal with the legal work for you.
What to expect if you want to remortgage
The conveyancing team at Winston Solicitors can act for you if you wish to mortgage or remortgage your property. If you decide to mortgage or remortgage your property, you will need to prepare in a number of ways, including:
- Doing your homework for mortgage deals
Ask your friends or colleagues to recommend a mortgage broker or financial advisor, or you can contact the bank or building society directly. When you speak to the lender or broker they should discuss the affordable options with you and help you choose the best mortgage to suit you. Your chosen lender may give you a decision in principle or a certificate confirming the amount that it is prepared to lend you. A decision in principle is not a firm mortgage offer. A firm mortgage offer will only be issued when the lender’s valuer has valued the property and is satisfied.
- Obtaining your existing mortgage account number
This will be on your last annual statement. Your conveyancer will need this to obtain a redemption figure and ensure that the existing mortgage is repaid on completion of the new mortgage
- Assembling leasehold information (if applicable)
If your property is leasehold, your conveyancer will need the name, address, email address and reference of the freeholder and management company or managing agent. Your conveyancer will need to provide details of the new mortgage to the freeholder and management company/managing agent on completion. The freeholder and management company/managing agent will charge a fee for accepting this information.
Your conveyancer will also need a copy of the insurance schedule and evidence that all ground rent, service charge and insurance payments are up to date, together with confirmation that the provisions of the lease have been complied with. The freeholder and management company/managing agent will charge a fee for providing this information/confirmation, and will often insist on supplying a full management pack even if the property is not changing hands.
Please note that leasehold mortgages involve extra work. Your conveyancer will charge an extra leasehold supplement to reflect this.
What to know if a property changes hands during a remortgage
A Deed of Covenant, in which the new owner promises to adhere to the terms of the lease, may be required. The freeholder and management company/managing agent will charge an additional fee for this and for providing any certificate needed by HM Land Registry.
Any share will need to be transferred to the new owner. The management company/managing agent may charge an additional fee for issuing the new share certificate.
Documents needed for a remortgage
If you have carried out any work to the property, you will need to pass all planning permissions, building regulation completion certificates, covenant consents, FENSA certificates, Gas Safe certificates, electrical documentation and other relevant documentation to your conveyancer. If you cannot find these documents, you may have to pay for duplicates or indemnity insurance.
Copies of the searches carried out when you bought the property may also be useful.
Understand the costs and fees when you remortgage
Try to budget for all the costs and fees relating to your remortgage. The costs and fees will include:
- the mortgage repayment (including any early repayment charge)
- any fees payable for management packs
- other fees payable to freeholders and management companies/managing agents
- costs of obtaining duplicate documents
- indemnity insurance premiums
- conveyancing fees (including search fees or “no search” indemnity insurance).
Finding a conveyancer for your remortgage
Speak to family, friends and colleagues, to see if they can recommend a good conveyancer.
You need to have confidence in your conveyancer. A good conveyancer will ensure that your remortgage process goes as smoothly as possible. The process will involve form filling, information gathering, telephone calls and emails.
You will be speaking to your conveyancer a lot during the process. Your conveyancer will be able to reassure you and address any concerns that you have.
5 tips for remortgaging your property
- Make sure you’re remortgaging for the right reasons and you can afford the repayments
- Research your new mortgage, you can move to a different lender to have the best product that suits you.
- Gather all the necessary documents including account details, leasehold information (if applicable), planning permission, certificates etc
- Be realistic with the costs and fees associated with a remortgage
- Advance warning: there will be lots of communication plus information required therefore choose a recommended conveyancer for a smooth transaction.