Leah Sharman
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Date Published:13 May 2020 Last Updated:19 Jan 2022

Now Is The Time To Remortgage

Conveyancing - Residential Property

On the 19th March 2020 the Bank of England cut the base rate to 0.1% – the lowest in its 325-year history. The knock on effect of this is that many mortgage lenders have reduced their interest rates.

Many individuals have mortgages where the interest rate is fixed for a certain period of time, for example 2, 3 or 5 years. Once that period has expired, the homeowner can look to remortgage their property, remortgaging is the process of taking out a new mortgage and repaying the old mortgage. Some mortgagors also take the opportunity to borrow more money in order to carry out works to the property or to release some equity.

Due to the situation with the Coronavirus some mortgage lenders have restricted the amount of mortgage products available. The different products available depend upon the Loan to Value (LTV) of the property; this is the size of the mortgage in relation to the value of the property. For example, a property valued at £250,000 with a mortgage of £125,000 would have a LTV of 50%. The lower the LTV, the better the products that are available and the more likely a mortgage lender will issue a mortgage offer.

Our role in completing the remortgage involves reviewing the legal title of your property and confirming with you any alterations or additions to the property, to ensure these are satisfactory and comply with your new lender’s requirements and any statutory regulations. We may need to carry out searches on the property (Local Authority, Water and Drainage and Environmental) although each lenders requirements vary and we may be able to obtain search indemnity insurance.

Upon completion of the remortgage, your old mortgage will be repaid in accordance with the final redemption statement and any surplus will be forwarded to you. An application will then be made to HM Land Registry to reflect the change in mortgage.

Many mortgage offers contain a Cashback incentive to pay for legal fees associated with remortgaging; this can be discussed with your mortgage broker when applying for a mortgage offer.

If you require any guidance, advice or direction with any legal questions regarding remortgaging, please contact an expert member of our property team on 01202 525333 who will be happy to help.