What is a remortgage and how does it work?

What is a remortgage?

A remortgage is when you obtain finance for your property to pay off your current mortgage which then replaces it.  This can be very useful if your mortgage started with a fixed rate period and that has now come to an end.  While we cannot assist in finding the new mortgage product for you, we can help redeem (pay off) any existing mortgage, draw down the funds from your new lender and make sure the new lender has the first charge over your property.

How long does it take?

Happily, remortgages are often significantly quicker than sale or purchase transactions.  This is due to a number of factors:

• You are not moving home so you don’t need to factor in the availability of removal firms;
• There is no chain so you don’t need to work with the available of preferred dates of any buyers or sellers;
• Often you don’t need to undertake searches or attend to any enquiries. As you live at the property (or have owned it for some time if you are remortgaging a buy to let property) this is usually sufficient for the lender and so they do not require in depth enquiries about the property before they use it as security.  While they may waive a full set of searches it is likely you will need to pay for ‘Search Insurance’.  It is a one off payment and the cost of it is typically based on the type of property, location and value.  

Can I transfer the property to someone else at the same time?

Yes- during a remortgage transaction the property can be transferred to a spouse or family member so long as both the new owners are on the mortgage. Please be aware though that once the property is in joint names both parties will need to consent to undo any transfer, the transfer may give rise to a Stamp Duty Land Tax liability and any gift / transfer may be a disposal for Capital Gains Tax purposes. Any property transfer should always be investigated thoroughly with a tax expert prior to exchange.

For further information on remortgaging, please don’t hesitate to contact our Conveyancing Team.