If you are reaching the end of a reduced-rate mortgage deal, remortgaging may give you the opportunity to find a better offer than your existing lender’s standard variable rate.
We answer some of the questions we are most frequently asked about remortgaging.
1. Do I need a solicitor to remortgage?
Unless you are staying with your existing lender, you will need a solicitor to deal with your remortgage. They will carry out due diligence work to ensure that the property meets the lender’s criteria.
2. What does a solicitor do on a remortgage?
The new lender will want to know that the property is good security for their loan. This means that your solicitor will need to investigate the legal title, carry out searches, obtain property information from you and report to the lender on their findings.
Your solicitor will also liaise with you to arrange completion and let you know how much your existing lender will need to redeem your loan with them.
Following completion, they will arrange for your new mortgage to be registered with the Land Registry.
3. When should I remortgage?
If you are on a fixed-rate, tracker or discounted rate mortgage, you might want to consider remortgaging a couple of months before the reduced rate ends, so that you can switch to the new deal straightaway, rather than being transferred to the lender’s standard variable rate, which is likely to be higher.
It is important not to remortgage before the deal ends however, as you will generally be charged a penalty for this. You can check with your lender or read the terms and conditions of your loan to see when you can move without incurring extra charges.
4. How long does a remortgage take?
The legal work can take one to two months to complete. You will also need to factor in the time your new lender will take to process your application. If they are busy, for example, if they have offered a good deal and have a large number of applicants, it can take weeks for them to issue a mortgage offer.
5. How much does a remortgage cost?
The legal costs of a remortgage are relatively modest, but you also need to account for additional charges. These generally include:
- Search fees or search indemnity insurance
- Land Registry fee for a copy of the legal title
- Fee for transferring money electronically
- Fees charged by your existing lender, which could include an administration fee
- Mortgage arrangement fees for your new mortgage
- Valuation fee charged by your new lender
- Land Registry fee for registering your new mortgage
For a comprehensive quote, speak to a remortgage solicitor to find out exactly what the costs will be.
6. How can I improve my credit score?
Improving your credit score might give you access to a wider range of potential mortgage offers. You may be able to improve your credit score by:
- Checking your credit score with the main credit agencies used by lenders (Equifax, Experian and Transunion) and contacting them to correct any errors in their records
- Using a credit card regularly, but paying it off each month
- Ensuring that bills are paid when due
- Closing cards that you do not use, including store cards
- Trying not to use more than 30% of the credit available to you
- Making sure you are on the electoral roll
- Closing any accounts held jointly with someone who has a poor credit score
- Not using your credit card at an ATM
- Trying not to take out credit just before you apply for a mortgage
7. How do I start a remortgage?
You will need to select the right deal for your circumstances. If necessary, an independent mortgage broker can help you with this. You can then apply and at the same time contact a remortgage solicitor and ask them to represent you. They will let you have the initial forms for completion so that they can start work as soon as your mortgage offer is confirmed.
Contact us
If you would like to speak to one of our expert property lawyers, ring us on 0333 3055 189 or email us at info@lpropertylawyers.co.uk
