Is remortgaging a property, quicker than buying or selling a property?
Many of us have taken out mortgages when buying our homes, but few appreciate the legal process involved in the buying or selling of a property. If you are now remortgaging, how does this differ from the standard conveyancing process? Is it quicker to simply remortgage than buy or sell a property?
What is a mortgage?
In simple terms, a mortgage is a loan used to purchase or maintain property or land. The borrower(s) agree to pay the lender an agreed amount, over an agreed timeframe. If payments are missed, the lender has rights to the property or land. However, once the mortgage is fully repaid, the redemption of the debt (the mortgage) removes the rights the mortgage company has against a property.
The creation of a legal mortgage is governed strictly by the Law of Property Act 1925.
What is a remortgage?
Remortgaging is where the money is paid off your existing mortgage and a new mortgage is taken out as a new product with a different mortgage company. This agreement will be based on the current value of your property, not your purchase price.
If you have an existing mortgage on your property, it could be beneficial to look to change to a different mortgage company as you may find a more favourable rate of interest available to you. When remortgaging, you can also choose to take some equity out of the property to assist you with any home improvements or any changes in your life, expected or unexpected.
Just be aware, there may be an early repayment charge to clear your existing loan. This will need to be considered against any savings you may make on the mortgage payments.
The remortgaging transaction
Many people are unaware when they instruct a conveyancer or lawyer to remortgage, that we are also obliged to act in the interests of the lender, ensuring that there is no conflict of interest between the parties.
There are different mortgage options available to you such as fixed-rate, tracker, and interest-only. Depending on the type of mortgage and the product that you have, you can look to move your mortgage on your existing property from one lender to another. The benefits of remortgaging are that it’s more affordable and ensures that you have a better product to suit your needs. You can also look to extend the term of the mortgage should you wish to do so.
We would always recommend that you use a mortgage broker when remortgaging your property as they can check the whole of the market and the various products available to ensure you get the best option for your specific needs.
Timeframes for remortgaging
Remortgaging a property takes far less time than it does to purchase a property. The average remortgage transaction takes around 4-8 weeks, although this is dependent on how long it takes for the lender to issue the mortgage offer. In comparison, a property purchase averages around 12-16 weeks.
However, there are some elements undertaken in a purchase that will still be undertaken with a remortgage. This includes checking the title of the property and, if required by the lender, undertaking new searches or organising search insurance.
The existing mortgage is then paid off and the new one is drawn down by the residential conveyancer or solicitor. Once the new mortgage is completed, an application is made to the Land Registry, similar to when a property is purchased, to change over the details of the mortgage. The previous lender’s charge is removed, and the new lender’s charge is registered in its place. As mentioned above, it is important to note that the legal representative will act for both you as the borrower and the mortgage lender.
If you are thinking about remortgaging your home, be assured that GA’s team of Conveyancing Solicitors in Plymouth has decades of experience in all aspects of residential conveyancing and has hundreds of 5* reviews on Google and Review Solicitors.
In 2023 GA Solicitors’ conveyancing team in Plymouth won two national awards for Client Care and Best Workplace at the LEAP Modern Law Conveyancing Awards. You can read more about this here.
Call our expert remortgaging Plymouth team today at 01752 203500. Alternatively email enquiries@GAsolicitors.com.
You can also read another recent article about 100% mortgages here.
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