What is the remortgage conveyancing process?
This article sets out the remortgage conveyancing process for a standard property and includes a few tips to help the process complete faster.
Step 1 - Verify your identity
Once you have applied for a new mortgage, your solicitor will need to verify your identity and carry out money laundering checks.
The vast majority of solicitors will now verify your identity using a third-party online service that costs around £10 per person.
COVID-19 has lead to some innovation in the process. Many firms are now asking the client to email a copy of their ID. A video call is then scheduled during which the client holds up a picture of their ID next to their face for verification during the call.
The solicitor will need to verify the identity of each person named on the mortgage and property deeds.
Step 2 - Check the source of funds
If you are paying off part of your existing mortgage, your solicitor will need to check the source of your funds in accordance with the Anti Money Laundering (AML) regulations.
The documents you need to provide funds will depend on the source of your funds. Your remortgage solicitor will provide you with details of the documents you will need, which could include:
|Savings||Bank or building society statements|
|Pension release||Pension statement|
|Property sale||A copy of the completion statement, and a bank statement proving that you have received the funds from the solicitor who handled the sale|
|Inheritance||A letter from executors confirming how much you have received, and a bank statement showing the funds were received from the executor’s account|
|Share sales or dividends||Share release or dividend certificate and proof you have received the fund from the company|
Other sources of mortgage funding can include sources as diverse as lottery winnings and injury compensation payments.
Cash, however, cannot usually be used to repay your existing mortgage as it can be hard to prove where the money came from. If you plan to use cash to settle part of your existing mortgage, your solicitor may be able to advise you further on your options.
What if I am remortgaging with funds from outside the UK?
It may be possible to use funds from outside the UK for your remortgage, but some solicitors will not accept funds from certain “high risk” countries.
The Financial Action Task Force (FATF) regularly update their list of high-risk countries. The EU also maintain a list of high-risk countries.
If you are using overseas funds as part of your remortgage, get advice from a solicitor as soon as possible. Check that you have, or can obtain, the required documents to prove the source of funds.
Step 3 - Check HM Land Registry title deeds
Your remortgage solicitor will obtain title registration documents for your property from HM Land Registry. These title deeds (called Official Copies) confirm that you are the legal owner of the property you are remortgaging.
The deeds also detail any legal charges registered against the property to protect a mortgage loan. The existing lender's legal charge over the property will be removed when the mortgage is repaid.
The solicitor will need to confirm that there aren't any other parties with a charge over the property
If you are remortgaging a leasehold property, your solicitor will check the title deeds to confirm that the leasehold title meets your new mortgage lender’s requirements.
The leasehold title deeds may also include covenants that inform your solicitor who they must notify if the charges on the property change or are repaid. The freeholder will usually need to be notified.
Step 4 - Review your mortgage offer
Your lender will issue the formal mortgage offer to your solicitor.
The mortgage offer sets out what the solicitor must do to satisfy the mortgage lender’s requirements. These requirements are set out in the Council for Mortgage Lenders (CML) Handbook.
Each lender has a different set of criteria, including many that apply specifically to leasehold properties. For example, each lender will have specific requirements relating to the length of the unexpired lease term.
Step 5 - Request current mortgage certificate
Your solicitor will ask your existing mortgage lender to provide a current mortgage statement.
This statement will confirm the amount required to redeem the mortgage. This outstanding balance will be repaid when the remortgage conveyancing process completes.
Step 6 - Apply for local authority searches
The CML Handbook also sets individual lender's property search requirements. Most lenders will only require a local authority (LA) search and many will accept a search indemnity policy instead. The latter is certainly the quickest and cheapest option so ask your solicitor if you can avoid the cost of a full search.
Step 7 - OS1 priority search and bankruptcy check
Your solicitor will then take out a pre-completion search called an Official Search of Whole with Priority (OS1).
The OS1 search prevents any other charges from being registered against the property. This ensures that the registered title cannot be changed until after the remortgage process has completed.
Your solicitor will also carry out a bankruptcy check to confirm that none of the legal owners are bankrupt.
Step 8 - Send the certificate of title
Once your solicitor is satisfied that you, any other registered owners of the property and the property itself all meet your new lender's conditions, a completion date can be agreed upon.
Your solicitor will send a "certificate of title" to your new lender and will request that the lender releases the remortgage funds.
Step 9 - Completion
Before completion, your remortgage solicitor will send to you a statement confirming:
- The outstanding balance that you must pay to complete the remortgage, or,
- The money you will be paid once the remortgage process completes
The statement will set out the mortgage advance from the new lender, but will also include an itemised list of other fees incurred during the remortgage process, such as:
- Legal fees
- HM Land Registry fees
- Local Authority search fees
- ID and bankruptcy checks
Once your solicitor receives the mortgage funds from your new lender and they are ready to complete, your solicitor will use these funds to repay (redeem) your current mortgage. The funds will also be used to settle their bill for legal fees and disbursements.
If any money remains (for example, you may have taken out a larger mortgage to fund the construction of an extension), these funds will be paid to you.
Step 10 - Post-completion
Your solicitor must register the new mortgage at HM Land Registry.
HM Land Registry may take some time to update the title register to confirm the new mortgage. This process can take months, particularly if the property is leasehold, but it usually happens “behind the scenes”, and will not affect the date your new mortgage rate starts.
Leasehold-related delays can also be caused by late payment of ground rent and service charges, or where the freeholder is refusing to release their notice until service charges are paid.
How long will the process take?
The conveyancing process for a remortgage is more straightforward than it is for a property purchase or sale. Conveyancing solicitors can usually complete the legal work on a remortgage in a few weeks.
As there is no buyer, seller or property chain, there is considerably less complexity and fewer delays waiting for responses from other parties.
Most mortgage lenders only require a regulated local authority search or search indemnity policy, so you won’t have to wait weeks for official property searches
How can Quittance help?
If you are buying, selling, remortgaging or transferring equity in a home, our panel of expert conveyancing solicitors can help.
We aim to deliver a stress-free moving experience. We focus on proactive communication to help drive your sale or purchase forwards.
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