Hello!
It’s finally time for an update on our remortgage process!
So relieved to say that our remortgage is complete! If you read my Remortgaging as our fixed term mortgage ends soon blog post, our three year fixed deal mortgage was coming to an end in January 2023 and we were worried about mortgage interest rates increasing in the future.
After doing some research, we found that some mortgage offers last 6 months so we applied for our remortgage deal in September so we could secure a rate earlier, rather than waiting until January to remortgage. We did this as we thought the mortgage interest rates would continue to increase. Looking at the below chart, I’m so glad we did it in September before the peak in mortgage interest rates in October!
Source: UK interest rates: What the rise means for you from BBC News
In my previous post, I talked about how we completed the forms from the conveyancer and today I wanted to share what happened next!
Overview of next steps performed by the conveyancers:
1) Check our property records held by the Land Registry
2) Receive the mortgage offer
3) Receive a redemption statement from our existing lender
4) Receive the remortgage money from our new lender
5) Complete the remortgage
Actions for us:
In September, we received a letter from the conveyancer asking us to complete a questionnaire which provides them with the relevant information for the remortgage and to also send across a signed Mortgage Deed.
The mortgage deed details the following:
· Lender
· Mortgage conditions
· Borrower name and address
· Property address
· Title number
It is signed by the borrower in the presence of a witness.
We were asked not to date the Mortgage deed as this is done by the conveyancer on completion of the remortgage. We were also informed that we only become legally bound to the mortgage and its condition when the remortgage is completed and the Mortgage Deed is dated.
At the start of January, we received a letter from the conveyancer confirming a completion date for our remortgage and a copy of the predicted completion statement.
The predicted completion statement shows:
· Total monies received
This was the mortgage advance and the amount we paid to obtain a copy of the lease.
Less
· The redemption figure
This is from the redemption statement from our existing lender which confirms the amount needed to repay the mortgage on the date requested.
If the mortgage advance from the new lender is greater than the redemption figure (amount you need to pay off your existing lender), then there is a surplus and this will be paid to you when the remortgage is complete.
For example, if the new mortgage is £250k and the amount needed to repay your existing lender is £240k, then there is a surplus of £10k.
If additional monies are needed to pay off the existing mortgage, then there is a shortfall.
For example, if the new mortgage is £250k and the amount needed to repay your existing lender is £255k, then there is a shortfall of £5k and the conveyancer will need to receive additional funds to complete the remortgage.
The conveyancer also asked us to provide proof of the source of funds for the shortfall we needed to pay. They requested that we make the payment for the shortfall so that it is received in their account the day prior to completion.
Tip! Before sending across the full amount, you might want to test with a small figure e.g. 10p and ask them to confirm they have received it before sending the full amount.
At the start of February, we were sent a letter to confirm that our remortgage was complete and that the conveyancer had served notice of the new mortgage on our landlord/freeholder. They also included the final completion statement.
Tip! Useful information we found out during the process was to check the terms of your Lease to see if the landlord/freeholder is entitled to an administration/registration fee. If they are, this fee must be paid otherwise it is a breach of the
terms of the Lease. This could mean that the Landlord may be able to forfeit your Lease.
Tip! The letter also informed us that a bank transfer for a surplus would be received
within one business working day of completion.
In mid-March, the conveyancer sent across a letter to confirm that the registration formalities were complete too! We received a copy of the Official copy of register of title for our reference.
We were really not looking forward to doing the remortgage but actually now that we have done it, it wasn’t too bad!
I hope this was useful!
Jess
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