Do I Need a Solicitor for a Remortgage?
If you want to remortgage, you may be wondering what the process entails and whether you need a solicitor at any stage of the transaction. Remortgaging is normally a straightforward process and, providing you are prepared, you should find that a remortgage completes quickly.
A conveyancing solicitor will be required at the latter part of the remortgage process. You can opt to use your own solicitor or one that has been allocated by the lender.
Let’s discover remortgaging and when a conveyancing solicitor is required.
What is a Remortgage?
A remortgage is when an existing mortgage is redeemed by another mortgage from a different lender.
Typically, mortgage lenders offer product terms of between 2 and 5 years for remortgages. When your product term nears expiry you will have three options:
- Let your mortgage continue with your current lender on their Standard Variable Rate (SVR)
- Renew your mortgage deal with your current lender if available through a Product Transfer
- Remortgage with a different lender and switch to a better deal elsewhere
Unless you have a short-term remaining on your mortgage, such as a few months, it is normally preferable to secure a new product on your mortgage with either your current lender or a new lender. For those who only have a short-term remaining on their overall mortgage, staying on the SVR is likely to be the most suitable course of action until the mortgage has matured. This is for a couple of reasons. Firstly, by staying on the SVR, you will not have any early repayment charges due when redeeming the product. Secondly, most lenders will not allow you to accept a new product for just a few months as this is considered short-term lending, which is against their criteria.
If you take a new deal with your current lender by accepting a Product Transfer, you will not need to use a solicitor. This is because conveyancing would have been completed when you took the mortgage originally and the charge on your title deeds will reflect your current lender. When the lender processes the Product Transfer they can update their records without needing to consult a solicitor.
What Does a Conveyancing Solicitor Do?
For a remortgage, a conveyancing solicitor will process all legal tasks involved in updating the charge register from one lender to another.
This process is expedited compared to your original conveyancing process and you will not need to wait for searches to be completed. For the most part, the conveyancing will be a box ticking exercise where the solicitor ensures the previous conveyancing process was completed correctly.
The solicitor will then update your title deeds digitally with HM Land Registry to remove your old lender’s charge and apply the new lender’s charge on the property.
The process can be complicated if issues arise such as:
- Additional charges on the property
- If the original conveyancing failed to spot something important
- If the property is unusual or listed
Issues with conveyancing when remortgaging are rare, and you should expect a swift process.
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Will I Always Need a Solicitor When I Remortgage?
Yes, you will always need a solicitor (also known as conveyancer) for a remortgage. Regardless of the property checks required by the new lender, a solicitor will need to update your title deeds and change the register.
Most lenders provide a ‘Free Legals’ incentive as part of their remortgage package. However, we would recommend that you use your own solicitor if you can afford the expense. This is because as the Free Legals solicitor acts for the lender rather than you as the client, you may experience a sub-par service. Some mortgage lenders may provide a ‘Cashback’ incentive to fully, or partially, fund the use of your own solicitor.
Lenders only work with trusted conveyancing firms and each lender will have a panel of solicitors that they are willing to do business with. This panel benefits consumers to some extent as lenders typically have fee arrangements with their approved solicitors to reduce costs.
If you want to use your own solicitor for a remortgage, you should check that they are on the lender’s panel in the first instance.
If they are not on panel, the solicitor can apply to join a lender’s panel. However, this can be a time-consuming process which will delay your remortgage. If time is a primary consideration with your remortgage, you should aim to use one of the lender’s approved conveyancers.
How Much Does It Cost to Remortgage?
Remortgaging typically has greater transaction costs than a product transfer. This is because you may incur legal fees as well as a booking fee with a new lender.
With that said, you should be aware that you might pay more in the long run by accepting a Product Transfer with your current lender. For example, if your current lender offers an uncompetitive interest rate, your monthly mortgage payments could outweigh the upfront cost of applying to a lender with a favourable interest rate.
You should consult with a whole of market mortgage broker, like Boon Brokers, to determine whether a remortgage or product transfer is most suitable. Boon Brokers has a sophisticated reminder system that will automatically notify you via post, e-mail and text 6-months before your existing mortgage product expires. This ensures that you are aware of your product expiry date with ample time for your broker to process the remortgage or product transfer.
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How Long Does Conveyancing Take When Remortgaging?
Conveyancing for a remortgage should be processed quickly. If all the paperwork is in good order, your conveyancer will be able to check everything over in a few hours and change the title deeds with HM Land Registry in a matter of days.
Some remortgages can complete in as little as 48 hours from the mortgage offer issue date, which is far shorter than the turnaround time on a new mortgage application for a property purchase.
The most common cause of delay to remortgage conveyancing is if there are issues with your property’s title that need to be remedied by the solicitor. This can delay the process by several weeks or months before the remortgage can complete.
Speak to a Mortgage Broker
When your mortgage product term is a few months before expiry, you will receive a letter or email from your current lender advising you that your term is ending. At that point, they will almost certainly offer you new loan terms to stay with them. Your lender will also advise you of the SVR that will be applied when your product term ends.
It is always best to speak to a mortgage broker to find out what deals are available elsewhere so that you can compare them against the deal offered by your lender. A Whole of Market mortgage broker will have access to a large range of lenders and will be able to advise you on the best course of action. In most cases, a broker will be able to access exclusive products that are unavailable to you as a consumer.
Boon Brokers is a Whole of Market Mortgage, Insurance and Equity Release Brokerage. Boon Brokers offers fee free mortgage advice.
Contact Boon Brokers and discuss your remortgage today.