What is remortgaging?

⁽¹⁾ A remortgage is a process that replaces an existing mortgage loan with a new loan either from a different lender or from your existing lender. The lender repays the existing mortgage debt to the original loan provider. The borrower is then left with just one mortgage loan, repayable to the lender. Borrowers consider remortgaging for various reasons. Often, the purpose involves saving money. Securing a new mortgage, at a lower interest rate than is afforded by the existing mortgage firm, may reduce the borrower’s monthly repayments. Obtaining a lower rate may also reduce the total amount of money the borrower must repay over the full life of the loan.

The conveyancing process for remortgaging

• If you have chosen a conveyancing firm like Convex, you will have to instruct the firm to act on your behalf. Once your instructions are received, your conveyancer will request that you provide the details of your existing mortgage. That is the existing mortgage account number, so as to obtain the title deed and redemption figure as soon as possible. You will also need to provide the details of your new mortgage lender and the building company insurance policy, which will come into effect once the remortgage has been completed.
• A survey or valuation is normally undertaken on the property by your new mortgage lender. Once the valuation has been completed, and your new lender has agreed to your mortgage, they will post you and your conveyancer a formal mortgage offer letter. This will include any special instructions which must be carried out in order for the transaction to be completed.
• Conveyancing firms will undertake all the appropriate searches for you such as, local authority and land registry. Once the mortgage deed has been drawn up, it will be sent to you for your signature and return. If as a part of any deal you have struck with your new lender, you are sending some of your own money; your conveyancer will require these from you.
• ⁽²⁾ Once your Conveyancer has received the necessary redemption figures from your existing mortgage lender. They will be possible for them to provide you with a Statement of Account delineating the balance which is due to you or from you on completion of your remortgage transaction. This is done in order to ensure that there are sufficient funds to meet all liabilities and expenses in relation to your remortgage.
• ⁽³⁾A completion date will be agreed with you. Completion is the day when your new mortgage monies (which will have been sent to your conveyancer a few days in advance) are used (along with any additional funds you are providing yourself) to pay off your old mortgage (and any others debts which are being reduced/settled as part of the transaction)
• The final part of the process is for a new Land certificate to be produced by the Land registry. This shows that the new lender has a First Legal Charge over your property, and also confirms that the previous lenders details have been removed. The original of this document will be sent to your new lender, with a copy to you.

A few complications could arise while you remortgage your house; good conveyancing firms can handle these small obstacles easily. Hence it is important that you choose a conveyancing firm that is well experienced in the process of remortgaging.

Source: ⁽¹⁾http://www.wisegeek.com/what-is-a-remortgage.htm

⁽²⁾http://www.lsols.co.uk/remortgagingguide.php

⁽³⁾http://www.web-conveyancing.co.uk/remortgaging.asp