Do I need a solicitor to remortgage? (& why)
Is there a need for solicitors when remortgaging?
Homeowners always ask if they will need a solicitor to help them with the remortgage process. Whether you need a solicitor or not will really depend on what you are intending to do. Are you getting a further advance? Consolidating debt with a remortgage? Or simply doing a product transfer?
In this brief guide, we will cover if you need a solicitor to remortgage, what they do, how to choose one and how much you can expect to pay one.
Most people remortgage to cut down the monthly costs of their mortgage. People do this in different ways. They can either get a better rate or increase their mortgage term.
When remortgaging it is important to ensure that whatever savings gained from remortgaging are not outweighed by the cost of remortgaging. Fees such as conveyancing fees, early mortgage repayment fees etc can rack up quickly.
Do you need a solicitor to remortgage?
It depends. If you are remortgaging with the same mortgage lender this is termed as a product transfer and you won’t need a solicitor to do this. If you, however, remortgage with a new mortgage lender then you will need a solicitor.
If you get a further advance from your mortgage lender then you will also not need to have a solicitor as there are no legal charges happening with the remortgage but simply a charge stating the increased amount of borrowing on the property.
Most mortgage lenders will also usually provide you with a solicitor with a free legal pack offer when you are remortgaging but you may still need a solicitor if the work you need to be done is outside the scope of a usual mortgage.
E.g adding someone to the mortgage( aka a transfer of equity) or removing someone from the mortgage.
There may also be stamp duty considerations when adding or removing someone from a mortgage so you may want to seek independent financial advice.
Yes, you can very well use the mortgage lenders solicitor. Most mortgage lenders will provide their solicitor to be used during the remortgage process regardless of you asking or requesting one.
If you choose to get a solicitor for your remortgage then you may want to first as the mortgage lender if they have any restrictions on the types of solicitors you may be able to use for your remortgage.
Can you add legal fees to your remortgage?
Most of the legal fees on remortgages are usually covered by the mortgage lender themselves. If there is a charge on the property then this will need to be paid upfront and cannot be added onto the remortgage.
If there are any fees and the mortgage lender allows you to add this to your remortgage you should be aware that you will essentially be borrowing this over the new mortgage term and this could potentially cost you a lot more than any similar short term credit product for the same amount.
One option to mitigate this is to overpay on your mortgage soon after you have completed this so reduce the increased balance which you added by including the solicitor’s fees in the remortgage.
How long does the remortgage conveyancing process take?
The conveyancing process when remortgaging could take as much as 2 months but can be generally quicker if you are remortgaging with the same mortgage lender.
The conveyancing process is much simpler during a remortgage but in some cases, some essential work still needs to be carried out.
ID Checks –
The solicitor will request your ID to carry out anti-money laundering and sanctions searches. This could be your passport or your drivers license.
The current mortgage –
Your solicitor will request details of your current mortgage through a redemption statement (you can see an example of the Halifax redemption statement here). The redemption statement will give full details of your mortgage, how much you owe? if there are any early repayment fees and the exact amount needed to redeem the mortgage at that time.
Leasehold checks –
The solicitor will check the lease terms and ensure that the remaining term left on the lease are in line with the lender’s eligibility requirements.
some mortgage lenders will require new searches to be carried out during a remortgage to ensure everything is fine with the property.
Property valuation –
the mortgage lender may carry out a desktop valuation and issue a valuation certificate to you and the solicitor.
The mortgage agreement –
your solicitor will usually check the mortgage agreement and its fine print to be sure that there isn’t anything that may be of concern to you. If there is then your solicitor will raise the issue with you or the mortgage lender.
Your signature –
Your solicitor will require your signature once everything is fine on the remortgage.
Bankruptcy checks –
your solicitor will conduct a bankruptcy search to ensure you have never been declared bankrupt or are currently going through a banktuptcy proceeding.
Land registry checks-
Your solicitor will also conduct checks at the land registry to ensure everything looks fine and there haven’t been any last-minute changes on the property deed.
On completion day your solicitor will receive the funds from the mortgage lender and pay off the old mortgage if there is any.Any leftover money will then be paid to you.
Registering changes with Land Registry –
Once your old mortgage lender has confirmed they’ve received the money and discharged their mortgage your solicitor will inform the Land Registry that a remortgage has taken place and update the legal title for your home by registering the new mortgage.
If you need financial advice and you live in the UK then you could contact the Money Advice service over the phone or via chat for impartial advice.
You can also contact the debt charity “Step Change” if you are in debt and need help.