Will you need to instruct a solicitor or conveyancer if you remortgage your property?

If you are looking to remortgage and are unsure whether a solicitor is needed or what steps need to be taken, then Goughs is here to assist. We have answered some of your typically asked questions to assist you in deciding what to do. 

Do I need a solicitor to remortgage?

If you’re simply borrowing more money on your existing mortgage deal with the same lender, this doesn’t involve any property ownership changes. So, the lender typically handles the process internally, and no legal work is required on your end.

Additionally, if you’re staying with the same lender but switching to a new mortgage rate or deal offered by them, this usually doesn’t involve any legal changes either. It’s essentially an administrative adjustment within the existing agreement, so again, a solicitor wouldn’t be necessary.

However, it’s crucial to remember, even when a solicitor isn’t mandatory, consulting one can still be highly beneficial. They can offer valuable expertise, ensuring everything is done correctly and protecting your interests throughout the process.

When do you need a solicitor to remortgage?

When remortgaging in the UK, you’ll need a solicitor in most situations. Here’s a breakdown of when you would definitely need one:

Changing lenders

This is the most common scenario requiring a solicitor. When switching lenders, the new lender needs legal checks to ensure your property is good security for their loan. This includes searches for:

1. Title defects – Any issues with ownership or restrictions on the property.
2. Planning restrictions – Limits on development or alterations you can make.
3. Environmental hazards – Contamination or flood risks.

Changing ownership

Adding or removing someone from the mortgage involves amending property deeds and ownership documentation, which requires legal expertise. This includes:

1. Transfers of equity – Adding a partner, spouse, or co-owner to the mortgage.
2. Severing joint tenancies – Removing someone from the mortgage ownership.

Releasing equity

Taking out a larger amount of money against your property’s value through remortgaging requires legal processes to ensure:

1. Security for the lender – The new loan is secured on the property with the correct legal documentation.
2. Compliance with regulations – Adherence to financial regulations and consumer protection laws.

Other reasons you need a solictor to remortgage

There are a handful of other situations where a solicitor will be needed to remortgage:

1. Leasehold properties – If your property is leasehold, the solicitor will handle legal aspects related to ground rent and service charges.
2. Boundary disputes – If there are any uncertainties or disputes regarding your property’s boundaries, a solicitor can resolve them before remortgaging.
3. Complexities or uncertainties – Any other complexities or unique circumstances surrounding your property or the remortgage process benefit from a solicitor’s expertise.

Should I remortgage?

There are several reasons why you might consider remortgaging your home, and it’s important to weigh the pros and cons before making a decision. One of the main reasons people remortgage is to get a better interest rate. If interest rates have fallen since you took out your original mortgage, you could potentially save a significant amount of money each month by switching to a new deal with a lower rate.

For example, if you have a £200,000 mortgage with a 5% interest rate, your monthly payment would be around £1,036. Remortgaging to a 3% rate could save you over £70 per month, or more than £840 per year.

You can also use equity release through remortgaging to access the value built up in your home. This money can be used for home improvements, consolidating debts or investing.

Finally, you may also choose to remortgage to change your mortgage type. Different mortgage types have different features and benefits; you could switch from a fixed-rate to a variable-rate mortgage, or vice versa, depending on your risk tolerance and interest rate expectations.

Is Equity Release the same as remortgaging?

An equity release differs from a mortgage and essentially means your lender will give you cash in return for a share of your sale proceeds when you sell your property. 

There are two types of equity release and each has specific conditions:

• Lifetime mortgage which requires all owners to be at least 55 years old.
• Home reversion plan which specifies all owners must be at least 65 years old.

What will a solicitor actually do?

A solicitor plays a crucial role in ensuring a smooth and secure remortgaging process in the UK, even when not mandatory. Here’s what a solicitor does during the remortgaging process:

1. Your solicitor contacts your existing lender to get your current mortgage details and request a redemption statement which will specify how much is owed and whether there are any early repayment charges.
2. If your property is a leasehold, your solicitor will complete checks to make sure sufficient time remains on the lease in order to comply with your new lender’s requirements. They will also contact your landlord to check if they have any requirements regarding notifying them of a new mortgage.
3. If your mortgage lender requests this, your solicitor will complete property searches. If searches are not requested, we will put in place a search indemnity policy.
4. Your solicitor will review the mortgage offer and confirm any terms and conditions once the lender has completed their valuation.
5. Arrange the new mortgage deed for signature.
6. Your solicitor will check you have never been declared bankrupt.
7. On the completion day, your solicitor will receive your mortgage funds, redeem your old mortgage and pay any other associated fees.
8. The last stage is for your solicitor to register your new mortgage with the Land Registry which will update your legal title documents.

What are the typical costs and fees involved in a remortgage?

Remortgaging in the UK involves various costs and fees, impacting the overall financial feasibility of the process. Here’s a breakdown of the typical expenses you might encounter:

Legal fees: Ours start from £850 plus VAT.

Land Registry registration fee: This can range from £20 – £910 depending on the value of the property.

Bankruptcy search: Totalling £2.40 (per individual) to ensure you have never been declared bankrupt.

AML Identity checks: Totalling £7.50 (per individual).

Priority search: A search checks that nothing has changed or been added to the property deeds since the remortgage process began and totals £3.60

Official Copy Entries / Title documents: totalling £7.20.

Searches or a search indemnity policy: The cost for this will differ based on the lender requirements and property value.

Click the link for more information about our residential property fees.

How long does a remortgage take?

Remortgaging is generally a quicker process than selling or purchasing a property. From receipt of the remortgage offer the process can be finalised within 4 – 8 weeks.

How can Goughs help me?

Goughs has a wealth of knowledge in dealing with remortgages in a timely manner. At Goughs we will offer you a dedicated solicitor, so you have a point of contact from your initial discussion. We will ensure the remortgaging process is dealt with as swiftly as possible.

Please contact any of our Wiltshire based offices or email info@goughs.co.uk for a discussion about your remortgaging needs and to receive your bespoke quote.

If you would like a free residential property estimate please complete our conveyancing quote form.