I've got my mortgage offer, what happens next?
Receiving a mortgage offer from your lender means you’re one step closer to remortgaging, but it’s important to understand the next steps in the process.
There are several stages involved in remortgaging, and getting your mortgage offer is just the start.
Here we explain the process that you’ll go through and the role of your conveyancer.
Why do I need a conveyancer when I remortgage my property?
Your mortgage offer is official confirmation from a lender that they’re prepared to provide you with a mortgage, but you’ll need help from a conveyancer to ensure all the legal boxes are ticked.
The legal work is carried out by the conveyancer on behalf of your new lender. Their role is to complete all the paperwork required and request the funds from your new lender, so that your existing mortgage lender can be repaid.
What will my conveyancer do? Remortgaging isn’t quite as simple as just shifting your mortgage across from one lender to another, and the conveyancing process is designed to make sure everything is done correctly.
Your conveyancer will start by completing a title check to determine that you’re the legal owner of the property that’s being remortgaged. To do this, they’ll contact the Land Registry and verify the information provided on the mortgage application.
They’ll then need to perform various identity checks to make sure you’re who you say you are. This is not only for them to protect against money laundering, but also to satisfy the requirements of the mortgage lender and the Land Registry. Proof of your ID usually takes the form of either your passport or driving licence, while a bank statement, Council Tax bill or utility bill are typically used to provide proof of your address.
Once your conveyancer has made these checks, they’ll ask your current lender for information about your mortgage. Your lender will send out a redemption statement which explains how much you still owe, and whether any exit fees or Early Repayment Charges are payable when your current mortgage is redeemed. Your conveyancer will also need details of your buildings insurance policy as it’s a legal requirement to have buildings cover when you take out a mortgage.
The next stage in the process is for your conveyancer to review your new mortgage offer pack. This will have been sent to them by your lender and will contain all the details about your new mortgage along with the instructions from them to your conveyancer.
Then it’s over to you to sign your mortgage deed, which must be signed in front of a witness. This can be more of a challenge due to Coronavirus, especially for those who are shielding or in quarantine. It’s possible however that a witness such as a neighbour can watch you sign the deed through a window, and they can then sign it themselves either with a different pen and/ or wearing disposable gloves.
Once you’ve sent the signed mortgage deed back to your conveyancer, they’ll request a final redemption statement from your current lender. They need this just in case your closing balance has changed. The conveyancer will then request the funds from your lender and any shortfall will need to be paid at this point. For example, if your new mortgage is for £130,000 and your existing mortgage is £131,000, you will need to pay the £1,000 difference to complete your remortgage.
Please note if you are borrowing extra money and have under estimated your existing mortgage balance you could receive less than expected when the funds are sent to you as some of this may be used to cover the shortfall.
Provided any shortfall has been paid, a completion date can be arranged. Your conveyancer will at this point notify the Land Registry to remove the existing lender charge on your property and replace it with your new lender’s charge.
How long will it take?You’ll need to allow at least four weeks from the date your mortgage offer is issued for a standard remortgage to complete.
If your circumstances are more complex and the conveyancer requires additional information, it can take longer than this.
You can read more in the following guides:
- Remortgaging a leasehold property
- Remortgaging a Buy to Let property
- Remortgaging a Help to Buy or Shared Ownership property
What can I do to speed up the process?Make sure you have any documentation you might need readily available so that you can get this to your conveyancer as soon as they request it. This includes proof of your ID and address and details of your building insurance.
You should also ensure your conveyancer knows how to get hold of you quickly in case they have any queries during the remortgage process.