How do mortgages work?

[silobass]

I need to remortgage as my fixed period is up. I see Nationwide are doing a decent deal at 2.14% which I'm happy with. It also comes with £500 cash back or free legal fees which is the bit that has me concerned!

It's the first time I've looked in to doing it without a broker but I am unsure of the actual money process. Do I need a solicitor or someone else to handle things? I was hoping I filled the form in, they send the money to the current lender to pay the balance and we're all done? Or is there more to it than that?

Thanks

[SS2.]

How remortgaging works

Remortgaging means moving your mortgage to a new lender while staying in the same property. [Barclays] guide can help you decide if it’s right for you.

Is it time to remortgage?

It’s definitely worth checking the latest offers if your current mortgage deal is about to end, or has already moved to a follow-on rate. For example, if your property is worth more than when you bought it, your loan-to-value ratio may have changed – and this could mean you have access to a wider range of deals.

Remortgaging could also help you raise money for home improvements or a special purchase, but think carefully about whether you can afford the extra amount over the full mortgage term. And if you’re planning to consolidate other debts, don’t forget that independent financial advice is available. Your home could be at risk if you can’t make the payments.

Big changes in your life, planned or unexpected, could mean that your current mortgage no longer suits your needs. Whether you’re starting a family or expecting a significant change to your income, remortgaging gives you a chance to find a deal with us that’s a better fit for you now and in the future.

Get ready to remortgage

The remortgaging process typically takes from 4 to 8 weeks after you apply. For most applications, you’ll need to speak to one of the lender’s mortgage advisers, who are qualified to advise you about the best deal for your needs. Before you get to this stage, think about the following 5 questions to help you get a clear idea of your situation and needs before applying.

1. What will it cost to leave your current mortgage?

Some mortgages include charges when you leave under certain circumstances, such as an exit fee or early repayment charge. This could be thousands of pounds if your current mortgage deal hasn’t ended, so check the documents you received from your current lender or contact them for details.

2. What do you want from a new mortgage?

Do you want to lower your monthly payments or have the flexibility to pay off your mortgage sooner? Is a fixed rate right for you, so your payments won’t change for a set period? Think about what you need now and how your needs might change in the future.

3. Is your credit score in good shape?

When you apply to move your mortgage, the new lender will check your credit score with credit reference agencies. Before you apply, make sure the details on your credit score are correct, as even a spelling mistake in your address history could cause a problem.

4. How much can you borrow?

Try our mortgage calculator to see how much you could borrow and what your monthly payments may be. You should also think about how a change in interest rates could affect your finances – our interest rate calculator shows how rate changes would affect your payments.

5. Which remortgage deals are available?

Once you know what you want and how much you can borrow for it, you can start comparing mortgage deals.

How the remortgage process works
Complete an Agreement in Principle

Most lenders now give you the chance to get an online Agreement in Principle (AiP). It’s a way to find out if a lender is willing to lend the amount you need, without a full credit check. You don’t need to choose a specific remortgage deal and it’s not a guarantee you’ll be approved for a remortgage – but it will help you understand your options.

Consider all the costs

To make sure remortgaging leaves you better off, check whether the lender you plan to move your mortgage to charges any of the following.

Application fee – a charge to set up your new mortgage. Also referred to as an arrangement, product or booking fee
Valuation fee – to confirm the value of your property
Solicitor’s fee – a solicitor will need to manage the transfer of your mortgage
Ask any prospective lenders if you’d need to pay an exit fee or early repayment fee if you want to remortgage again in the future.

Apply for your new mortgage

Once you have an AiP, you can apply for your remortgage. You’ll need to provide information about your personal and financial circumstances, as well as details of your current mortgage. Make sure you have documentation to prove what you earn and the paperwork for any loans or other credit commitments.

Completing your remortgage

The final steps of a remortgage are pretty much the same as a buying a new property. Your new lender will carry out a credit check to confirm your current circumstances and arrange for your property to be valued. You’ll need a solicitor or conveyancer to handle the transfer of your mortgage, and some lenders may offer this as a free service.

[Sarnie]

silobass said:

I need to remortgage as my fixed period is up. I see Nationwide are doing a decent deal at 2.14% which I'm happy with. It also comes with £500 cash back or free legal fees which is the bit that has me concerned!

It's the first time I've looked in to doing it without a broker but I am unsure of the actual money process. Do I need a solicitor or someone else to handle things? I was hoping I filled the form in, they send the money to the current lender to pay the balance and we're all done? Or is there more to it than that?

Thanks

Yes you need a solicitor to remortgage, they need to deal with the registering the interest of the lender with the land registry and the removal of the previous lenders charge......along with the redemption of the current mortgage.

If you take the £500 cashback, you'll need to source and pay for your own solicitor.....which would need to be under £500 to make it worth while.

[silobass]

Thanks. Would using a broker generally include the solicitor part in the fees? Last time we used a broker it was when the mortgage company paid him. I don't recall ever using a separate solicitor.

[Sarnie]

silobass said:

Thanks. Would using a broker generally include the solicitor part in the fees? Last time we used a broker it was when the mortgage company paid him. I don't recall ever using a separate solicitor.

Not really sure what you are asking?

If you changed lenders last time you used a broker, then you would 100% have needed a solicitor to do that..........

[silobass]

Sarnie said:

Not really sure what you are asking?

If you changed lenders last time you used a broker, then you would 100% have needed a solicitor to do that..........

I wasn't sure if the broker sorted it all out for me. I would think he did.

I think I'll give my broker man a call, it will be much easier. Thanks for replying

[BoRED S2upid]

silobass said:

I wasn't sure if the broker sorted it all out for me. I would think he did.

I think I'll give my broker man a call, it will be much easier. Thanks for replying

The answer is more than likely yes. Either the lender will use their firm of solicitors “free” of charge to you or your broker will use theirs I know we didn’t have a separate solicitor for any remortgage. Using your own just adds another layer of hassle to the whole process.

[Foundthecure]

I’ve remortgaged 12 times and never used a solicitor

[Foundthecure]

Foundthecure said:

I’ve remortgaged 12 times and never used a solicitor

Unless the bank did something and it was included in the fees??

[IanJ9375]

Foundthecure said:

Unless the bank did something and it was included in the fees??

The same bank? If staying with the same lender you won't need the solicitor

[JaredVannett]

Sarnie said:

...

If you changed lenders last time you used a broker, then you would 100% have needed a solicitor to do that..........

Foundthecure said:

I’ve remortgaged 12 times and never used a solicitor

I'm confused.com

[Condi]

JaredVannett said:

Sarnie said:

...

If you changed lenders last time you used a broker, then you would 100% have needed a solicitor to do that..........

Foundthecure said:

I’ve remortgaged 12 times and never used a solicitor

I'm confused.com

No need to be confused....


If you are with Lender A, and remortgage with Lender A, then no solicitor required.

If you are with Lender A and remortgage with Lender B, then solicitor required.



However, lenders will often have their own solicitors they offer to you 'for free', so when they advertise 'free legal fees' it just means they're paying for it using their own firm. These days its unusual for the home owner to pay for and arrange a separate solicitor.

[Sarnie]

Transferring to a new rate isn't "remortgaging"......it's simply a Product Transfer.

Remortgaging involves moving to a new lender and simply isn't possible without an acting solicitor, in most cases supplied and paid for by the lender....

[IanJ9375]

Sarnie said:

Transferring to a new rate isn't "remortgaging"......it's simply a Product Transfer.

Remortgaging involves moving to a new lender and simply isn't possible without an acting solicitor, in most cases supplied and paid for by the lender....

Semantics, bloke in the street will still call it "re-mortgaging" whether it's switching products or switching lenders.

[Sarnie]

IanJ9375 said:

Semantics, bloke in the street will still call it "re-mortgaging" whether it's switching products or switching lenders.

It may be semantics if you know the difference but it's not if you don't..........

[evoivboy]

Foundthecure said:

I’ve remortgaged 12 times and never used a solicitor

I've done it twice to different banks, no solicitor needed for me, all done with the banks solicitor

Edited by evoivboy on Tuesday 11th September 20:53

[Sarnie]

evoivboy said:

I've done it twice to different banks, no solicitor needed for me, all done with the banks solicitor

Edited by evoivboy on Tuesday 11th September 20:53

"no solicitor needed for me"

"all done with the banks solicitor"

So you used a solicitor

[Condi]

Sarnie said:

"no solicitor needed for me"

"all done with the banks solicitor"

So you used a solicitor

The bank used a solicitor on his behalf.

Schematics again, but you know as well as I do that the person buying the mortgage will have had 0 involvement with the solicitor other than one letter at the beginning introducing themselves and one at the end to tell you its all done.

[Sarnie]

Condi said:

The bank used a solicitor on his behalf.

Schematics again, but you know as well as I do that the person buying the mortgage will have had 0 involvement with the solicitor other than one letter at the beginning introducing themselves and one at the end to tell you its all done.

Thats wholly incorrect..........I wish for all my clients that was the case though!

[Condi]

Sarnie said:

Condi said:

The bank used a solicitor on his behalf.

Schematics again, but you know as well as I do that the person buying the mortgage will have had 0 involvement with the solicitor other than one letter at the beginning introducing themselves and one at the end to tell you its all done.

Thats wholly incorrect..........I wish for all my clients that was the case though!

For a simple remortgage with a different company its always been my experience Either a good broker who did all the paperwork for me, or good mortgage company maybe.