The Financial Conduct Authority does not regulate some types of buy to let or commercial mortgages.
As a homeowner, there will come a time when your initial fixed-period is coming to an end. At this point, you’ll have a couple of options.
Perhaps you want to move home or let out your current home as a buy to let? Both are completely viable options for homeowners, though more often than not, people will choose to remortgage.
As providers of expert remortgage advice, we get a lot of questions when we speak to customers. A common remortgage question we get, is whether or not they need a solicitor for their remortgage.
It’s a completely reasonable question, after all, you needed one the first time around!
The short answer, is yes, but we will go into a bit more detail here, so you are better prepared ahead of your eventual remortgage or remortgage to release equity.
A solicitor is important during the remortgage process, as when you remortgage, you’ll be switching to a new lender. This means there needs to be a transfer of the legal right to repossess the property, in the event of missed payments.
Your solicitor will be able to take off the charge from your first lender, and add on the charge from your new lender, allowing your new mortgage to go ahead. You will generally not need a solicitor if you are doing a product transfer mortgage, as this all stays with the same lender.
In addition to this, you will also need a solicitor for the removal of a name from the mortgage, say in the event of divorce or separation. This is because the legal ownership of the property is changing, and they will need to amend the deeds.
You also will need a solicitor if you are adding a name to your mortgage, perhaps a friend or partner. This is a common occurrence following on from the latter point. This is called a “transfer of equity” and your solicitor will need to work with you to draw up an ownership agreement.
Most of what the solicitor will do, will be done in the background. This means you can rest easy whilst they work on all the legalities of your case, such as the aforementioned points, as well as things like land registry.
In addition to the above points, the solicitor will also perform some checks on you and the properties value.
Where you will have to get involved, is with something called a legal pack. This is simply where the solicitor will take some information from you for themselves, so they can arrange everything as planned. Your mortgage broker legally cannot pass on your information, so you’ll need to help them out here.
Depending on your mortgage lender, you’ll find that there are varying solicitor costs. There are lenders who will offer a free legal service (or a cash back sum), though in our eyes, the main difference between those and external companies, is the quality of that service.
We are able to recommend to you trusted solicitors who are able to help you out with the complex legalities of your remortgage process. They put you first, catering to all of your needs, just like us here at UK Moneyman.
Whilst more often than not these will incur charges, it’s arguably a better choice due to the level of service they provide. On top of this, if you take a cash back option, this may cover most of your legal fees anyway, so it’s a cost-effective and more beneficial route to you.
Furthermore, those free legal services generally won’t be able to help with removal of a name or transfer of equity, so if that is a part of your remortgage plan, you will need to go to an external company regardless.
Whilst there are various mortgage fees you may be able to add onto your mortgage balance, you cannot add the solicitors legal fee onto it. You will need to pay for their service in full.
If you’re nearing the end of your initial fixed-period and are looking at taking out a remortgage, get in touch with us today by booking your free remortgage review.
We’ll take a look at your case and do our best to find you a more suitable deal, whether you’re looking for a simple remortgage, looking to remortgage to release equity or are looking at capital raising options.
When the time comes, we’ll also recommend trusted solicitors to help you with all of the legal aspects of your remortgage process, should you need that recommendation from us.