Most mortgage products last for a specific period of time. When this period ends the rates often increase. It is usual to take out a new mortgage product, again for a limited period, on a rate which is lower than the standard variable rate. This will apply to the loan on your main residence or any Buy to Let properties you may own.
During the lockdown it was not possible for surveyors to carry out physical inspections of properties. Which meant that a number of remortgages were not possible. With the easing of restrictions, the availability of remortgaging has returned. You should now contact your independent financial advisor to see what is possible for you and your particular circumstances.
It is particularly relevant that you consult an independent financial advisor at this time. To find out what borrowing is available. Due to Covid19 lenders have become more cautious in lending. Nationwide have recently increased the minimum Loan to Value borrowing percentage to 15%. This means you will need to put in at least 15% of the purchase price, plus costs, in addition to any other lending restrictions.
Instructing us early in the process can enable you to discuss any particular issues you have as well as complete due diligence. To generally get ahead of the game so we can often ensure, with your co-operation, that we are ready to draw down the new mortgage funds once the offer is received.
The biggest query we have when dealing with remortgages is why we ask for so much information. For new clients we use the standard sale forms. As we are required to investigate title on behalf of the new lender. We therefore raise enquiries with you as if you were selling the property and the new lender was purchasing.
It is important that you give us accurate information in the forms in order that we can fully advise the lender. If you provide misleading information then you may be in breach of your mortgage conditions. You could be liable to the lender for any losses they suffer.
Each lender is different so we cannot be specific, but it is usual for lenders to accept search indemnity insurance in place of the usual searches. Search indemnity insurance is significantly cheaper and is also available instantly whereas searches take a little time to come through.
The usual searches would include: –
- Local Authority Search
- Drainage and Water Search
- Environmental Search
In Eastbourne, Wealden, Lewes and Rother these searches collectively usually cost a little over £300. In Hastings this cost increases to over £450. For terms of timescale, this varies between the different authorities but you should assume these would take around 3 or 4 weeks to be returned.
Certain lenders allow for search indemnity insurance to be provided in respect of one or more searches but require other searches to be carried out. This can still be beneficial as it is usually the Local Authority Search which is most costly and timely.
Where properties are leasehold we will need to make enquiries with the Landlord to ensure that: –
- The service charge and ground rent are paid up to date
- There is valid insurance in place for the building
- There is a valid fire risk assessment and asbestos report in place if applicable
We will also need to review the lease to ensure that the terms of this are compliant with the lender’s requirements. These requirements vary from lender to lender and we must ensure that things such as the remaining term, ground rent provisions, insurance requirements etc are suitable for your particular lender.
You should be aware that your Landlord may make an additional charge for providing us with this information.
Once we have carried out investigations and arranged your signature to the new mortgage deed we will look to agree a completion date with you and arrange draw down of the funds and obtain a redemption figure for your current mortgage. We normally need to provide the new lender with a minimum of 5 working days’ notice to enable completion to take place.
Once legal completion has taken place we will deal with the post completion formalities and registering the remortgage with the Land Registry. We will provide you and your new lender with an updated copy of your title once the registration process has completed.
Why use us
We are a local firm of solicitors who are more than happy to speak to and meet with you during the transaction. Rather than an autonomous out of area conveyancer with whom your contact is likely to be limited.
In some cases, lenders offer ‘free’ legal work in respect of a remortgage. You must carefully consider the terms of this to ensure it is what is says on the box, usually it is not. Whilst the ‘legal’ work may be free of charge there will likely be numerous disbursements which the lender’s chosen conveyancer will add on and charge you for. In addition, if they are required to do anything other than the straight forward remortgage they will make additional charges for this work which are significant.
Even if the entire process is completely free of charge you will often be looking to remortgage near the end of the fixed rate period. In most cases the process is started with a month or so remaining of the initial fixed rate period. This should be more than sufficient time to complete a remortgage. The ‘free’ conveyancers, however, are often slower as they have considerably more transactions to process. If your transaction is delayed so that you fall into your current lender’s standard variable rate this can cost you a significant sum of money each month.
A number of lenders now offer cash back incentives with a number of products. These cash backs can cover a large proportion, in some cases all, of our legal fees and disbursements. This will vary from lender to lender on the availability and sum of any cash back.
In terms of timescale we would expect to be able to complete a remortgage within a month. Provided the paperwork is given to us in a timely fashion. This means that we can often time completion so that the old mortgage is redeemed on the first day of the standard variable rate period. Meaning you do not have to pay any early redemption penalties but also do not lose out by spending months on your current lender’s standard variable rate.
Get in touch
Hart Reade are here to help you in Eastbourne, Meads, Hailsham and Polegate. All departments are fully operational and ready to progress matters quickly.
If you would like to get in touch with one of our Property Conveyancing Solicitors, then please call 01323 727321. Or alternatively, please fill in the form below and someone will be in touch.
Author: Andrew Pluck. Head of Department, Partner, BA Hons (Law)
Please note that this article does not constitute legal advice. You should always speak to a legal professional to discuss your circumstances and consider your options.