The Key Phases Involved in a Property Remortgage Transaction

There are various reasons why a person might want to remortgage their home. For some, it is a case of securing a lower rate. Others are looking for a greater level of security. Remortgaging is often a viable way for people to subsidise home improvements, consolidate debts, or help their children onto the property ladder. Sometimes people get sick and tired of the poor service they receive from a particular provider, other times a lender desires greater flexibility.

Whatever a person’s reasons for remortgaging, there is one factor that remains constant: the necessity for quality conveyancing. There are nine key stages in the remortgaging conveyancing process, and each requires a level of knowledge and experience that only top conveyancing practitioners can offer. The process can be carried out by either licensed conveyancers or conveyancing solicitors, either of which have the skill set and experience to handle the remortage conveyancing process.

Stage 1: Obtaining Quotes and Estimates

In finding the right conveyancer, it is necessary to obtain at least three separate quotes. During this process, it is advantageous for the prospective client to speak with the person who will oversee the remortgaging process, in order to ascertain whether an affable working relationship is likely to be established. Good conveyancing generally engenders good communication, and so a conveyancer should always be more than happy to make the time for a prospective customer.

Stage 2: Instructing the Conveyancer

Once a client has chosen a conveyancer to handle their remortgage, the conveyancer receives instruction to proceed. The conveyancer opens a file on behalf of the client and drafts a letter of instruction. The letter of instruction outlines various terms, the conveyancer’s obligations and a breakdown of costs. At this stage, the client needs to provide proof of identity via a passport or driver’s licence.

Step 3: Receipt of Confirmation

Once a conveyancer has applied to the client’s prospective new mortgage provider, it is essentially a waiting game: the conveyancer cannot proceed further until a letter is received from the mortgage provider, confirming that the provider is in agreement for the conveyancer to oversee the transaction. Once this is confirmed, the conveyancer receives a copy of the mortgage offer.

It is important that the client realises that their chosen conveyancer is now responsible for any negligence and any failure to meet the expectations of the mortgage provider. It is therefore the duty of the conveyancer to undertake searches on the property, investigate title deeds and ensure that everything is as it should be. This protects both the mortgage provider, as well as the client, should a situation occur whereby a property needs to be sold or repossessed. Typical things that a conveyancer might be under obligation to scrutinise, on behalf of both the client and the mortgage company, include:

•    The legitimacy of any adventitious structures including lean-tos, extensions, outbuilding, conservatories, etc
•    The securing of adequate buildings insurance
•    The complete payment of any outstanding mortgage

Stage 4: Application for Deeds and Compilation of Documentation

Stage 4 requires the conveyancer to apply for current copies of the properties deeds, obtainable via the Land Registry. The conveyancer also has to compile various pieces of documentation on behalf of the client, all of which are necessary for the remortgaging process. These include:

•    Existing paper title deeds
•    Searches
•    Planning consents
•    Building regulation approvals
•    Plans
•    Indemnity insurance policies dating back to the property’s initial purchase
•    CORGI, FENSA and Electrical certificates that prove the safety condition of the property’s services

Any delay in the provision of documentation equates to a delay in the remortgaging process, and so the swift gathering of documentation is always advisable.

The conveyancer will then ensure that all documentation is in order, as well as liaising with the client in relation to any restrictive covenants (legalities that inhibit the client from using the property for certain purposes). Typical restrictive covenants involve using a property for commercial purposes and making vast alterations to the property’s original structure. Should the client have breached any such restrictive covenant, then the conveyancer has the option of obtaining retrospective consent, or obtaining indemnity insurance.

Stage 5: Obtaining the Redemption Statement

Stage 5 sees the conveyancer obtaining a redemption statement from the client’s existing mortgage provider. This is a statement that elucidates how much the client owns, plus additional factors such as early redemption fees and administration fees.

During this stage, the conveyancer will need to confirm that the new mortgage is enough to pay off the existing mortgage. Should this not be the case then completion cannot go ahead, and alternative remortgaging arrangements need to be made.

Stage 6: Signing the Mortgage Deed

It is during stage 6 that the conveyancer obtains the mortgage deed and gets the client to sign it. The mortgage deed differs from any acceptance form that would have been completed for the benefit of the mortgage provider, rather, acting as a legal document that confirms the mortgage provider as the legal owner of the property.
Once the conveyancer has prepared the deed, it is either sent to the client or the client comes into the conveyancer’s office to sign it in person (generally whichever is quicker). It is usually during this stage of the process that the conveyancer arranges for the client to sign a document that exempts the client from Stamp Duty Land Tax (which is only relevant to a purchase, as opposed to a remortgage).

Stage 7: The Certificate of Title

Provided the conveyancer is happy that everything is above board, a Certificate of Title is sent to the new mortgage provider. This Certificate of Title confirms that everything has been checked, and that the conveyancer is happy for the money to be requested.

It then becomes possible for a completion date to be set, along with a redemption figure for the existing mortgage. All of this is outlined in a statement received by the client, along with any monies to be paid to the client, once the existing mortgage is paid off and the conveyancing fees have been paid.

Prior to the exchange of monies, the conveyancer will run a bankruptcy search on the client, along with a land charge search  (ensuring that no additional financial charge has been added to the property, with any other financial institution, since the date that the conveyancer received deeds from the Land registry).

Stage 8: The Day of Completion

The day of completion is when the loan money is transferred to the client’s account, which is then used to pay off the existing mortgage. Once it has been confirmed that the old mortgage provider has received payment, it is a case of the client becoming accountable to their new mortgage provider.

Stage 9: Confirmation

In this final stage, the old mortgage provider issues the conveyancer written confirmation that all outstanding monies have been received. The existing legal charge, registered to the deeds of the property in relation to the former mortgage company, are removed.

The conveyancer then makes an application to the Land Registry, in order for the new mortgage to be registered in place of the old one. Documentary proof of this is sent to the conveyancer, who then passes copies onto the new mortgage provider, as well as the client.

There are many facets that make up the remortgaging process, and it only takes one small oversight for the whole process to turn awry. It is therefore essential that an experienced conveyancer is chosen to deal with the entire remortgaging process: from start to finish.

Tags: conveyancing process, Conveyancing Process when remortgaging a property, Remortgage Conveyancing, Remortgage Conveyancing Process