FAQs

A remortgage is when you move your existing mortgage to a new mortgage deal with a different mortgage lender or you move your existing mortgage to a different deal or product with the same mortgage lender; your new mortgage product will replace your old mortgage.

There are lots of reasons why you might want to remortgage your home which include:

• When the fixed interest rate on your current mortgage product is coming to an end and you want to secure a better deal or rate of interest. When the fixed interest rate period on your mortgage expires, the outstanding mortgage amount is usually then subject to a standard variable rate of interest which as the name suggests, can vary from month to month resulting in uncertainty about your monthly mortgage payments. Many people choose to secure another fixed interest rate to given them more certainty over the affordability of their mortgage repayments. If you have a fixed interest rate, your mortgage repayments will not be affected if and when the Bank OF England increase interest rates.

• If there are better mortgage deals than your existing mortgage product, then you may want to take advantage of one of these deals (but bear in mind that there are costs involved in remortgage and so it is important to make sure the cost savings of any new mortgage product are not outweighed by the cost of remortgaging).

• If there is equity in your property, you may be able to borrow more money. Sometimes it is easier and / or cheaper to borrow more money against your property than it is to take out an unsecured loan; you may also be able to borrow more money when it is by way of a mortgage.

• If your circumstances have changed as a result of a separation or divorce, you may need to remortgage your property to remove your ex-partner from the mortgage (and title of the property). You may also need to borrow more money in these circumstances to buy your ex-partner’s share of the property. In these circumstances, a remortgage will take place at the same time as a transfer of equity.

• If you have a new partner that has moved in with you, you may want to add them to the title and mortgage so a transfer of equity and remortgage is needed to do this.

• If you want to overpay, but your existing mortgage lender or product won’t let you.

• You may wat to switch to an interest only mortgage from a repayment mortgage or vice versa to better suit your financial situation.

Remortgaging may not be the best thing for you to do though if:

• You have a very small mortgage and may be less likely to make a saving if the fees are high

• Your early repayment charge is very large and so it may be too expensive to change your mortgage product until your early repayment charge reduces.

• The value of your home has dropped
• You’ve had credit problems since taking out your last mortgage – lenders can be selective about who they lend to and the Financial Conduct Authority requires them to carefully check mortgage affordability to ensure you could afford to pay.

• You’re already on a very good rate.

You should always weigh up the pros and cons or remortgaging and speak to a mortgage broker for advice on what the best deals are for you and your situation.

A remortgage is when you move your existing mortgage to a new mortgage deal with a different mortgage lender or you move your existing mortgage to a different deal or product with the same mortgage lender; your new mortgage product will replace your old mortgage.

There are many reasons that people choose to remortgage, such as:

• When the fixed interest rate on their current mortgage product is coming to an end
• When there are better mortgage deals than their existing mortgage product and they want to take advantage of one of these deals
• When they want to borrow more money against their property

It is always good to do your research when you are thinking of remortgaging so that you are aware of all the different mortgage options available to you. It can be really helpful to speak to a mortgage broker who will be aware of the existing and new mortgage deals available and can help you find the product that is best for you and your circumstances.

You can also speak to your current mortgage lender to see if they are able to offer you a better deal and then you would be able to switch your mortgage product.

There are costs involved in remortgaging and these usually include the following:

• Fees charged by your new lender
• Conveyancing costs for dealing with the redemption of your old mortgage and completion of your new mortgage.
• Property valuation costs
• Potentially, early repayment charges on your existing mortgage if you repay the loan before any fixed interest rate period has come to an end.

Remortgaging does involve legal work and a conveyancing solicitor will need to be appointed to carry out the legal work for your lender and you. A conveyancing solicitor will need to review the title of the property, obtain redemption figures for your existing mortgage to ensure there are sufficient funds to pay this mortgage off on completion of your new mortgage, review and prepare a report for you on your new mortgage offer, send the mortgage deed to you to sign and register the new mortgage at the land registry.

A remortgage will typically take 4-8 weeks to complete after applying for your new mortgage.

Exchange of contracts happens towards the end of the legal process when you sell or purchase a property.

Before exchange of contracts, there are processes and checks which will need to be completed before you can exchange and ensure the property and the legal title are satisfactory for both yourself, and your mortgage lender (if applicable). Mortgage lender’s have their own terms and conditions which need to be met, which your conveyancer will need to comply with, before they will proceed with your mortgage offer. During the process of conveyancing, the draft contracts will be issued to the purchaser’s solicitor. The purchaser’s solicitor will review the contract pack and raise any necessary enquiries on the title of the property and the contract pack. The purchaser will also need to submit their searches (this is optional if you are a cash buyer). The searches consist of local search, water search and an environmental search. Based on the search results, you may require further searches. For example, a coal mining search. It may be necessary for further enquiries to be raised off the back of the searches. Once all enquiries are satisfied and the contract paperwork is signed and returned, you would be in a position to agree a completion date and proceed to exchange of contracts.

Once all enquiries have been answered, all contracts are signed and everyone within the chain are willing to proceed, contracts will be exchanged. Prior to exchange, there will be a negotiation on what the completion date will be and this will need to be agreed between the chain. Once this is agreed, your solicitor will need to prepare your exchange. If you are selling this will include requesting your redemption statement from your current lender, to repay the mortgage. If you are purchasing and have a mortgage lender, this will include requesting mortgage funds from the lender in readiness for the completion. The lender will usually require 5 working days notice. If you are a cash buyer, your conveyancer will let you know how to transfer the required funds. The conveyancer needs to ensure everything is in place prior to exchange of contracts, to ensure there is nothing to prevent you from completing on the legally binding completion date.

On exchange of contracts, you are committing to sell or purchase a property. This is a legally binding contract, so once contracts are exchanged, if you do not complete on the agreed completion date, there will be legal consequences which can come at a great cost to you. This can include paying interest to the other party (seller or buyer), loss of your deposit (which is usually 10% of the price of the property) and paying costs to the other party in the contract.

It is therefore important that when you do come to exchange contracts, you are sure you are happy to proceed with the transaction, as it is difficult to get out of a contract once contracts have been exchanged.

What is a chain? This is a number of property transactions, buyers and sellers who are all connected. If Mr A is selling to Miss B, and Miss B is purchasing from Mr C, and then Mr C is also purchasing another property. They would all be within the same property chain, this would be a chain of 3. They would all be connected to each other.

If the buyer of your property is already in a chain, this will add to your ongoing chain on the property you are purchasing. The longer the chain, the longer it will take to complete the transaction on the day of completion. If the chain your buyer is in is quite long, the money will need to be transferred up the chain before it reaches your solicitors to complete your sale. If you are also purchasing a property as well as selling, you would then need to send this money on to your seller’s solicitor to proceed with the completion.

Another point to consider with a long chain is that if one party pulls out, this can be due to an issue with the house or due to the length of time it is taking, this could lead to the collapse of a full chain depending on where they are placed within the chain. If the person of the bottom of the chain was to pull out, for example a first time buyer, this would cause issue for everyone else in the chain. As the house at the bottom of the chain would need to find a new buyer and begin the whole process again. Everyone else within the chain would need to delay their move until the new buyer is ready.

Title deeds prove ownership of a property, this also provides information on any historic agreements with the property which you would not be aware of without the title deeds. The deeds will detail any rights granted or reserved against your land, any restrictions on the land and also positive and negative covenants. Covenants are an agreement between parties and run with the land, so an agreement on the land over 200 years ago can still affect your land now and is legally binding.

The deeds confirm details of rights of way, covenants, any registered charges and also the legal registered owner (the registered proprietor). Your title deeds may be registered or unregistered.

Registered

If your property is registered, the title deeds will be registered with land registry. This will be the title register, there are often other documents which are a part of the title deeds. This could include a transfer, a conveyance or a deed. This all-forms part of your title deeds.

The land registry was first created in 1862. From 1925 it became compulsory for land to be registered, this was brought about by the Land Registration Act 1925. This means that any land that now triggers registration, such as a sale or transfer of equity, will need to be registered by law. This is compulsory.

Unregistered

If the property is unregistered, your title deeds will be contained within a bundle of documents and kept on paper. It is important that if your property is not registered that you keep your title deeds safe.

The title deeds will compromise deeds, possibly a conveyance, a transfer and any registered charges. The deeds will confirm rights of way, which are granted to others and also reserved for your use. This will include the running of services and access to neighbouring property if needed. If there is a registered charge contained within the bundle of documents, this should include a vacating receipt from the mortgage lender, which confirms that the legal charge has been repaid.

It is important with unregistered property that all documents are kept safe and together, so this does not cause issue when you come to sell your home.

When you are selling a house, prospective buyers will want to come and view the property before they can decide whether they would like to put an offer in.

You will want to ensure when presenting your home to potential buyers that the best features of your home are brought to the attention of the person viewing your home, as they are more likely to put an offer in if the best features are highlighted.

Estate agent

If you allow an agent to conduct viewings on your property, they are more likely to know what the buyers are looking for as they may have discussed this with them previously. The estate agent can then stage the house, to make the house more attractive to the person viewing the house.

If there are any issues the viewers have, the agent can also suggest changes to the property which potential buyers may raise as a concern. Someone viewing a house with an estate agent is more likely to give their honest opinion on the house, rather than if they view the property with the seller of the home.

Conduct viewings yourself

You know your home the best, so you may prefer to show potential buyers around your home yourself. You will be aware of all the best selling points and best features of your home, that an estate agent may not be aware of from visiting the house.

If you are conducting the viewings yourself, you are more likely to be able to offer flexibility to people who have reduced availability. For example, if a buyer can only come on an evening after work, the seller of the house is more likely to be able to accommodate this rather than the selling agent.

Another point is that some people may not be comfortable with people walking around their home when they are not there, as your home keeps all of your personal belongings.

Whether you conduct viewings on your home yourself is a personal preference. There are benefits to having the estate agent conduct a viewing for you (if this is an option), but there are also benefits to doing this yourself.

The completion date is the date you collect your keys and move into your new home. On this date, the outstanding balance of money for your property sale or purchase will be transfer to the other party’s solicitor. On receipt of the funds in other party’s the solicitor’s account, completion will be confirmed. If you are selling a property as well as purchasing another property, you will need to await receipt of the funds from your buyer. Once your solicitor has the funds from your buyer, this can be transferred to your related purchase to complete the transaction.

The completion date when selling or purchasing a property needs to be agreed between all parties within the chain. This needs to be a convenient day for all, so coming to an agreed completion date requires a lot of communication between parties, often with assistance from estate agents to mediate between parties where there is a disagreement on a date.

There are several factors to consider when choosing a completion date, this will come down to personal preferences and commitments. Someone who doesn’t work the typical Monday-Friday job and works shifts, may prefer not to complete on a Friday. There are several factors to consider when agreeing a date:

• Are your buyers purchasing with a mortgage? Most lenders require at least 5 working days’ notice to release mortgage funds, so this needs to be considered when agreeing a completion date.
• Does someone within the chain need a specific amount of time between exchange and completion? In some chains, seller’s will be moving abroad or into rented accommodation, so they will require a longer period of time between exchange and completion. This needs to be considered when agreeing a date between parties.
• Do you need to find a rental property once you sell your home?

The most popular day to move house tends to be on a Friday. Home movers prefer this day as it allows them to have the weekend to unpack and settle in, ready to return to work on the following Monday. Doing this usually requires them to take just one day of annual leave on the Friday. If you are within a chain, you usually have less freedom on choosing a completion date and this is likely result in your completion date being agreed on a Friday.

If you are selling a property, you will not need to arrange any kind of survey. This is for the purchaser to arrange themselves.

The surveyor will only need to contact you to gain access to the property, so they will contact you to arrange a time which is convenient for you.

There are a number of different types of survey that your buyer may choose. It is recommended to go with a RICS survey, as they are regulated by The Royal Institute of Chartered Surveyors.

Full Building Survey 

This does exactly as is described, a survey of the full building and is the most thorough. This will assess the condition of the visible and accessible parts of the building, conducting a report on any required repairs and maintenance required on the property. This includes assessing the roof, chimney, brick work and pipes. It will also assess whether these are works required immediately, or within a certain amount of time. The surveyor will go into much more detail with this report, than they would with any of the other surveys available. This is a level 3 survey.

Home Buyer Survey 

This survey is a bit more basic than the full building survey and will not go into the same depth. It will provide condition ratings on any defects, and will include the review of the roof and pipes etc, to check for any significant damage. This is the most popular survey buyer’s tend to pick when purchasing a property. The surveyor will review the visible aspects of the property and provide a condition report to the buyer. Based off this report the buyer will be able to raise any issues with you as the seller, that they may request is rectified. This is a level 2 survey.

Condition Survey 

Again this is a review of the visible aspect of the property and confirm defects, along with any possible legal issues to consider. This will not outline advice on required repairs and maintenance to the property. This is a level 1 survey.

The survey on the property is completely the purchaser’s responsibility, if they decide to proceed with one.

If your Lender has arranged a property valuation, then that valuation is purely for your Lender to be able to assess the adequacy of the Property as security for its proposed loan to you. If the valuer decides the property is not worth what you are purchasing the property for, they may down value the property which means you may need to renegotiate the purchase price. The lender could also decide not to grant an offer on the property, meaning you may need to approach another lender to see if they would be willing to lend. The valuation report is based on a limited inspection and contains much less thorough and detailed advice about the Property than you need as a prospective owner and occupier. The valuation report is not a structural survey which requires a much fuller inspection and gives much more detailed advice about the Property.

A question that is often asked if whether you will need a survey, as well as a mortgage lenders valuation. As often purchasers are happy to proceed with the lender’s basic valuation. We would always recommend that a structural survey is undertaken in addition to the lender’s valuation, as you are not able to rely on the lender’s valuation. The survey can also pick up on issues that may come at a cost to you in the near future, if this is picked up prior to proceeding with a purchase, you can ask the seller to rectify any issues before exchange and completion.

The valuation can also come at a cost to you, which the lender may ask you to pay upfront prior to the valuation or add to the loan. Although some lenders, may offer one valuation free of charge. This differs between mortgage lenders.

Physical Valuation 

For a physical valuation the valuer will attend the property, they will attend the property, take pictures and put together a report for the mortgage lender.

Desktop Valuation 

If a desktop valuation is completed, this is done completely remote based off information in the local area. This is usually done when there is a new build property, mortgages will be granted prior to the property being signed off by building control and part way through the build, so it may not be safe for the valuer to access the property to complete the valuation.

Drive by valuation 

This is often used for a remortgage rather than a new property purchase. This is exactly as described, the valuer will often drive by the property and assess the valuation based off this along with knowledge of the local area. They may have a walk around the exterior of the property and the local area too to assess the value.

It would be best to ask some of the questions you have for the conveyancer before you instruct them, as this will help you to decide if they are a good fit for you. For example, are they fully online or will you have the opportunity to meet them and go through the paperwork in person, this will be a personal preference and help you decide if they are a good fit for you. This would also be a good time to ask questions about the transaction and what steps you will need to go through. You can ask what their role will be and what they will need to do. You can also find out from the outset what will be required from you in terms of paperwork and identity checks etc. If you talk through what is required from you initially, there will be no surprise later in the transaction as you will know what to expect.

There are a number of important questions you should ask your solicitor when you are selling a property.

Selling

• Does the purchaser have a preferred completion date or deadline they need to work to?

• Will you pay the estate agent fees on my behalf or do I need to do this directly?

• Will you repay my mortgage?

• How long will the process take?

• Is there any additional paperwork you need from me to progress?

• Who will be handling my file and do they have a direct contact number I can reach them on?

• How often can I expect to hear from you?

• If you have had works carried out to the property, you should ask the Conveyancing Solicitor what paperwork is required to provide to the sellers.

Dependant on your personal situation, there will be additional questions to ask your Conveyancing Solicitors.