A re-mortgage simply means swapping your existing loan with Bank A for a new, and usually larger, loan with Bank B. It is not to be confused with a top up loan which involves merely increasing your loan with your existing lender.
People usually re- mortgage because the new lender offers them a bigger loan at a more attractive rate.
In effect, a purchaser/mortgagor seeking to re -mortgage his property is looking for an entirely new loan, so the procedures involved are very similar to those where first time buyers are obtaining a loan for their house purchase.
Typically, the steps are as follows:
The person applies to the lender for the new loan and shows that repayments have been kept up for the existing loan.
Talk to the broker or lender about perhaps fixing the new loan at a set rate for 3/5 years.
Try to avoid any interest free periods, as the sooner capital and interest are paid off, if you can manage both, the better.
The new bank or building society is not familiar with your house so it will arrange a valuation of the property for which you probably have to pay.
On receipt of loan approval, a copy would be sent to your solicitor who takes up the title deeds from your old bank.
Your property solicitor may ask you if you have carried out any alterations or extensions to the house which required planning approval or building regs approval. If you have extended your house beyond 40 m² in area, you will not be able to proceed until your planning documents/certificate are in order.
In addition, your solicitor may ask whether you have a married (or divorced) since he/she last saw you, as he/she is required to disclose to your new bank your current marital status.
Your solicitor then certifies the title to the new bank and arranges up-to-date searches. If the bank appoints its own solicitor, then your solicitor sends all the deeds and certificates to him for checking on the bank’s behalf.
After the new loan check arrives, your solicitor will pay off any remaining balances owing to your old lender. The rest of the check goes to you after he/she accounts for his own solicitor’s fees and outlays.
The mortgage is registered in the land registry while your old one is cancelled. All documents remain with your new lender.
If a person requires legal assistance on a remortgage matter, we can be contacted on (052) 612 1999 or (01) 546 1121.
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