Instructing A Remortgage Solicitor – Everything You Need To Know
Remortgaging a property you own can help you switch to a better deal. It can also be a way to avoid lender fees or release equity in your home. But do you need a remortgage solicitor to make all this happen?
Let’s take a look into what remortgaging is all about and where and when solicitors are going to be called for:
What Does Remortgaging Mean?
“Remortgage” is the name given to the process of changing from your existing mortgage deal to a different one on the same property.
This new deal may be with your existing mortgage lender or with a different one. The latter will often be because a different lender offers a better or more convenient financial arrangement.
Why Would I Choose To Remortgage?
Most people choose to remortgage because they spot a better deal that will give them a lower monthly repayment rate.
However, there are also many other reasons why remortgaging might be a good idea in your particular case, including:
- Avoiding SVR – Standard Variable Rate is the interest lenders charge after the initial period of a fixed or tracker mortgage ends.
- Changing provider – in a world where banks continue to “go under”, some people are switching to lenders perceived as more reliable. Other lenders provide fixed payments that can help you feel more financially stable or allow you to overpay to pay off faster.
- Releasing equity – this is a way to turn your investment in your home into money for other purposes. Most popularly these days, this is done by parents to fund a house purchase for their children.
Do bear in mind though that choosing to remortgage isn’t free. There can be early exit fees on some mortgages as well as arrangement fees, valuation, fees, broker costs, and more.
This makes it important to calculate how much money you will actually be saving set against any possible reduction in monthly fees (if that’s your reason for remortgaging).
Do You Need A Solicitor For A Remortgage?
If you are staying with your current mortgage lender after you remortgage, you don’t need a solicitor. This is technically called a “product transfer”. There will be fees if you are increasing the amount you borrow and maybe for changing terms, but no legal action is usually needed.
However, you will need a conveyancing solicitor if you are:
- Changing to a new lender – will almost always require a solicitor. Most lenders don’t operate unless you have professional legal representation.
- Adding someone to your mortgage – commonly done when partners move in together, adding someone to your mortgage requires a “transfer of equity” that uses a legal document called a “transfer deed” to change the legal owners on the title of the property.
- Removing someone from your mortgage – again, the typical example is when a couple divorces. This requires a similar change to the above but in reverse.
Do be aware that adding someone new to the mortgage will mean your lender will want to have credit checks and other confirmation that the new person will be able to meet the monthly repayments.
Similarly, if you are removing someone, your lender will want to assess those people still left as liable on the mortgage to ensure they can meet their financial obligations.
Should I Use The Mortgage Lender’s Conveyancing Solicitor?
Some potentially good news is that most mortgage lenders have their own preferred solicitor to handle remortgages.
There are some upsides to this. Firstly, it tends to be included for free. This can save you a few hundred pounds in solicitors’ fees.
However, the downside is that you often have to use the preferred law firm. You don’t have the ability to choose another even if you suspect your lender’s choice won’t deliver the best service.
How Much Does A Solicitor Charge For A Remortgage?
It’s common practice for mortgage lenders to have a chosen conveyancing solicitor they work with. Most lenders will include the legal fees this firm charges in their remortgage service for free (though it’s always worth double-checking this).
As mentioned above, this means you are stuck with this provider no matter their quality of service. It’s also likely that free packages won’t cover adding or removing people from the mortgage, so do be sure to discuss this at the start.
If you are able (or need) to choose your own conveyancer, the legal work required normally means a solicitor charges around £350 for a remortgage.
How Long Does Conveyancing Take When Remortgaging?
Remortgaging will take an average of eight weeks. This means it’s worth planning at least that long in advance if your current arrangement is due to expire.
This average may be reduced if you are choosing a product transfer with your existing provider.
Find The Right Solicitors For Remortgages
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