Remortgaging does involve legal work as part of the process. Although less complex than applying for your original mortgage, it does require the support of a solicitor or conveyancer to do the work. Let’s take a look at the remortgage conveyancing process, including everything you need to know when you’re thinking about applying for a remortgage deal.
What is conveyancing?
Remortgage conveyancing is the legal process of transferring property from one lender to another. A lender will require a licensed conveyancer or property solicitor to carry it out. It ensures that the new lender has their charge properly registered against the property being remortgaged, and the previous mortgage is paid off.
Do you need a conveyancer when remortgaging?
When you remortgage, you’re not buying a new home and the ownership of the property isn’t changing hands - so you shouldn’t need a conveyancer, right?
Not quite. If you’re taking out a new deal with your current lender, then it’s considered a product transfer and doesn’t require any additional legal work. So you don’t need to engage the services of a conveyancer or solicitor in this case.
However, if you’re remortgaging with a new lender, it will require remortgaging conveyancing. A solicitor or conveyancer will carry out checks on behalf of your new lender and make sure that the new mortgage is registered against your property at the Land Registry.
The remortgage conveyancing process
So, what is the process for conveyancing when it comes to remortgaging? And how long does it take? Here are the main steps you need to know.
Step 1: Identity checks
The first step of the process is for your solicitor to verify that you are who you say you are. This is usually done after you’ve applied for the remortgage - even if you’ve already had your identity verified by your new lender, your solicitor will want to carry out their own checks. These will need to be done for each person named on the mortgage and property deeds.
Step 2: Check your current mortgage
If you’re using some of your own funds to pay off part of your existing mortgage the solicitor needs to check the source of your funds, in line with anti-money laundering regulations. The documents you need to provide will vary depending on the source of your funds, and your solicitor will let you know what they need. This could be your bank or building society statements, your pension statement or a copy of your property completion statement if you’re selling another property.
Step 3: Check the title deeds
Your solicitor will then need to check the title deeds for the property from the Land Registry. These documents are called Official Copies and confirm that you are the legal owner of the property you’re looking to remortgage.
The deeds note any borrowing (for example, secured loans) registered against the property – known as legal charges. Your existing lender’s legal charge will be removed when the mortgage is repaid. If any other charges are to remain in place after the remortgage goes through you’ll need the second charge holder to agree to a ‘deed of postponement’ before your new mortgage can complete. If this is the case, there is usually an additional legal cost to arrange this.
If you own a leasehold property, at this stage, the solicitor will check the title deeds to make sure that the leasehold title meets the requirements of your new lender.
Step 4: Review the remortgage offer
The next step is then for your solicitor to review the lender’s formal mortgage offer. The offer sets out what the solicitor needs to do to satisfy the mortgage lender’s requirements.
Step 5: Request your current mortgage statement
Your solicitor will get your current mortgage balance from your mortgage provider in the form of a Redemption Statement. This should confirm the amount needed to pay off the mortgage at the end of the remortgage conveyancing process.
Step 6: Apply for searches
Your solicitor will now apply for the searches set out in your lender’s mortgage offer. Most lenders only require a Local Authority search, which is an enquiry to your local authority/council about your property. However, many lenders will accept a search indemnity policy instead of a Local Authority search, which can be a far quicker and cheaper option, so it’s worth asking your solicitor if it’s possible to opt for this instead.
Step 7: Pre-completion check
Another check that needs to be carried out by your solicitor is called an ‘Official search with priority: whole title (OS1)’. This prevents any other charges from being registered against your property, ensuring that the title can’t be changed until the remortgage process is finished.
Step 8: Bankruptcy check
At this point, your solicitor will also carry out bankruptcy checks to make sure that none of the people named in the deed is bankrupt.
Step 9: Certificate of Title
When your solicitor is satisfied with all the checks a completion date can be determined. Your solicitor will send your new lender a ‘Certificate of Title’. It confirms that all the checks were satisfactory and your solicitor will request that your lender releases your remortgage funds.
Step 10: Completion
You’ll receive a statement from your solicitor before completion. It will either confirm the outstanding balance that needs to be paid to complete the remortgage or the money you’ll receive once it’s completed, if you’re raising extra money.
They’ll also send an itemised list of all fees and disbursements, such as:
- Legal fees
- Land Registry fees
- Local Authority search fees
- Bankruptcy checks
Once your solicitor receives the funds from your new lender, they’ll use the money to repay your current mortgage and settle the above fees and disbursements.
If you’ve taken out a larger remortgage for home improvements or other reasons, you’ll then be paid the remaining funds directly.
Step 11: Post-completion
After completion, your solicitor will register the new mortgage with the Land Registry. This can take some time to update, especially if you have a leasehold property.
