What is re-mortgaging?
Re-mortgaging is the process of paying off one mortgage with the money from a new mortgage: or the transfer of a mortgage from one lender to another. You’ll ask your bank/lender for ‘additional money’, whether that’s to make your current mortgage payments cheaper, to get a better deal, consolidate debts, release equity or in need of some money for a kitchen upgrade etc.
The main reason for why people take out a new mortgage or renew their mortgage is to reduce their current monthly repayments on their property. When re-mortgaging it can be a stressful process not only due to paperwork but with the dealing of money and any financial issues/situations you may be in.
It’s a popular option to take out another mortgage loan with the same lender as it can avoid a lot of additional paperwork than if you were to go with a new lender. When re-mortgaging with your current lender, they’ll simply offer a new rate/deal which will feature little or no additional work. The whole re-mortgaging process is a lot quicker if you decide to stay with the same lender, which means your stresses can reduce. However, staying with the same lender may not be the best option. It’s a good idea to shop around as other lenders can offer better, cheaper deals.
So, what does the re-mortgaging process entail? Most lenders will include a free legal package featuring re-mortgaging deals as well as their chosen conveyancer who will help with the legal work. It’s important to be aware of whether the legal package is free and whether you’re able to shop around for your own conveyancer. It’s worth noting that many lenders will only work with pre-approved conveyancers, however, here at Arrow Conveyancing we work with the vast majority of lenders.
The whole process usually consists of around 10 steps. The first is an ID check, to check whether any money laundering has taken place on your accounts. The next includes your current mortgage, where your conveyancer will ask for a redemption statement, providing details on how much you owe, any exit fees and early repayment charges.
What follows are leasehold checks, property searches and a valuation on your property by the lender. Your conveyancer will then look at the fine print in detail, checking the terms of the new mortgage offer and any issues within the paperwork.
The last stretch includes the signature, final checks for any claims of bankruptcy on your behalf, a land registry search which makes sure nothing has changed on the property since the re-mortgaging process began, then finally the completion of the re-mortgaging process. Your conveyancer will receive the new mortgage funds from your new or current lender. After that, they’ll pay off the old mortgage and any fees, followed by sending any remaining money to you. There is an additional step of registering these changes with the land registry. This is when your solicitor will inform the land registry that a re-mortgage has taken place on the property and will conduct any updates for the legal title.
Depending on whether you stay with your current lender or move to a new one, the whole process can take up to 1-2 months. It’s generally quicker if you stay with the same lender but, as mentioned previously, that may not be the best option for you.
The Importance of a Conveyancer
A conveyancer is vital for when you’re making any big changes to your mortgage. One of those changes could include adding someone, either a friend or a partner to the mortgage. It may also include removing someone from a mortgage. These points alter the changing of ownership of the property in question, referred to as ‘transfer of equity’.
However, you may not require a conveyancer. Cases such as getting an advance on your existing mortgage with your current lender is one of those, as it includes no legal charges and only changes the loan amount and repayment price.
Here at Arrow Conveyancing, we want to help you navigate through the re-mortgaging process as smoothly as possible. Helping you avoid any traps and ensure you get the best deal to suit your individual situation. Don’t hesitate to contact us to see how we can help you.
Arrow Conveyancing Ltd.
Call: 0116 266 5394
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The information contained in this article does not constitute financial advice or recommendation and should not be considered as such. Arrow conveyancing does not offer financial advice and is not regulated by the Financial Conduct Authority (FCA), the authors of this article are not financial advisors and are therefore not authorised to offer financial advice.