How a conveyancing solicitor deals with remortgage issues of clients
By: Ittaman Pattat | Posted: 19th February 2010
Remortgage is probably the easiest of all conveyancing work. There are generally only the lender and the client to deal with and no other party solicitors to communicate with. A remortgage is generally conducted by junior members of staff with supervision. In particular the cost of using a conveyancing solicitor to conduct a remortgage transaction can be either too costly for the client or non-profitable for the conveyancing solicitor.
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Remortgage is usually a method of refinancing. It is the process of paying off one mortgage with the proceeds from a new mortgage using the same property as security. The term remortgage is commercially practiced in UK. Its main purpose is to secure more favorable interest rates from a different lender. Basically it is the transfer of mortgage from one lender to another. Now we will discuss the issues a conveyancing solicitor faces when conducting a remortgage transaction.
Remortgage can be conducted for commercial properties as well as residential properties. For example, it can be done in the case of homeowners. They may choose to remortgage for various reasons. They may want to reduce the size of repayments, to pay off a mortgage earlier, to raise capital, or to consolidate other debts. They may also be what is known as ‘mortgage tarts' - these are people that jump from mortgage to mortgage when discounted interest rates come to an end. Conveyancing solicitors deal with clients from all over the World and these clients come with different social, cultural and religious beliefs which also influence their approach to a remortgage transaction and it is imperative that the solicitor is aware of the client's expectations and manages it so that a simple transaction does not become convoluted.
A remortgage is generally done very quickly. It should be completed within 5-7 working days from receiving the mortgage offer. On completion, the new mortgage lender would have sent funds to the conveyancing solicitor who will use some of these funds to settle the monies owed to the existing mortgage lender and any remaining funds would be sent to the client. However the work here is not over for the conveyancing solicitor, the process continues until the new mortgage lender's details are registered against the title of the property as the main charge.
Homeowners often misuse the expression remortgage when they are simply switching from one product to another with the same lender; this is not a Remortgage which involves the removal of one legal charge over a property and its substitution with another in favour of the same lender. As a conveyancing solicitor you need to be business savvy and ready to get involved with clients on a practical level and ensure they understand exactly what they are doing. Especially when commercial remortgage is concerned as the remortgage may have many considerations such as company debentures, personal guarantees from directors, business valuations, good will, assets and fixtures and fittings. Hence a commercial remortgage can be very complex and these are what conveyancing solicitors should be focusing on and merely supervising junior staff on other residential remortgage cases.
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Tags: proceeds, debts, new mortgage, solicitors, repayments, refinancing, mortgage lender, supervision, residential properties, article body, religious beliefs, conveyancing solicitor