Q&A: Moving your mortgage

Can re-mortgaging really save money?

More often than not more people pay more for their mortgage than they should.  Interest rates charged by some lenders are often high to compensate for the cost of advertising attractive headline interest rates.  On top of this lenders are charging high arrangement fees and levying heavy early redemption penalties. For these reasons you need to check very carefully before committing to any change.

Is there any help around to assist me?

There are professionals around that specialise in this area.  Some work for the lender and can only advise on the lender’s range of products. There are others who are totally independent and who are free to give advice on products from the whole of the market. Be careful however as some charge a fee for their advice whilst others charge both a fee and take a commission from the lender with which the mortgage is placed. It is best to shop around and to always check the rates quoted by the advisor.

At MJP we can put you in touch with an Independent Financial Advisor and if you decide to place instructions with the Advisor and we are paid a referral fee we will be happy to share this with you.

Can I do it myself?

Yes but with care!

Here is a check list:

• Check the terms and conditions of your existing mortgage to see if there is penalty for switching mortgage. If there is, you must decide if it is worth switching to a different rate or stay put until the penalties have expired.
• Explore with your current lender if they can offer a more favourable deal
• Shop around in any event and look towards a different lender to get a better deal.

Could I re-mortgage instead?

Yes.

As well as reducing your monthly payments, you can also use re-mortgaging as a way of releasing some equity that has built-up in your property's value.

Borrowing through your mortgage may be much cheaper than taking out a personal loan, but the debt is secured meaning that if you cannot keep up with additional payments, you could risk losing your home.

Which deal is best for me?

There is a wide choice of  products and here are a few of the more popular ones:

• Fixed-rate mortgages are ideal for people who want certainty and must be able to regulate how much they will be spending each month.
• Discounted loans offer a reduction off the standard variable rate for a set period. If rates fall further, the rate that you will pay will also go down. However, when rates rise, so will your mortgage payments.
• A capped-rate loan will set a limit on the rate you will pay. If rates rise, your payments will not go above that level. However, if rates fall below the cap so will your repayments.
• Flexible mortgages allow you to overpay and underpay when you choose and without penalty. This is ideal for people who have fluctuating incomes or who want to clear their mortgage early.

What do I need to look out for?

Avoid deals with extended redemption penalties.

Extended redemption penalties are often hidden in the small print of a mortgage contract and are sometimes called early repayment penalties or charges.

Before you agree to a mortgage you should be presented with a key facts document. This should outline all the mortgage charges and small print in plain English.

Always read the key facts document thoroughly and if you are unsure of any clauses take advice. At MJP we can help you and provide advice on any queries you may have.

How do I apply?

Obtain a 'redemption statement' from your existing lender.

This will tell you how much you owe.

You must then complete an application form from your new lender.

Your new lender will value your home. This will cost between £200 and £300.

Most lenders will also charge an arrangement fee.

Some lenders offer dedicated re-mortgaging services with free legal work and valuations but others will charge for this service. At MJP we can offer a legal service for re-mortgaging at prices starting at £250 Plus VAT

How long does it take?

It should take about a month to complete the process, if not sooner

You will get a mortgage offer of advance, if the lender's surveyor is satisfied with the value and condition of your home.

Your new lender will liaise with your existing company.

Once you have received a completion statement from your solicitor or new lender, the process has finished.

For further details on how MJP solicitors can help you please call 01603877004 and ask for David Pett or email david.pett@m-j-p.co.uk

Morgan Jones and Pett Conveyancing Service - 01603877004

Do not buy a house without first checking its condition - could save you misery and money!!

Why buy a house without first checking it is structurally sound?  You would not look to buy a car without making sure it was roadworthy. When you buy a property (other than a new home) you will not have any remedies against your seller if you find out that there is something wrong with the property after you have bought it. It is what we call ‘Buyer beware’.

For this reason we always at MJP Solicitors advise those looking to purchase to obtain a survey. There are various different types of survey.

The most basic is a mortgage valuation. Here the mortgage company surveys the property to ensure that is it worth what they are lending to you. They are not worried about any money that you are putting in and you are not able to rely on these to the same extent as you would a more thorough (and costly) survey.  These reports should not therefore be relied upon. 

The most common form of survey, and the one we recommend, is a homebuyers report. This is much more detailed than the simple valuation and will give you details of e.g. damp problems and roofing issues. You can rely more on this more thorough type of survey. They cost around £350 and represent a sound investment.  To know what you are buying before committing to a property is a must for any home buyer.

At MJP we can organise a Home Buyers Report for you.    We will be paid a commission for putting you in touch with a surveyor.  This is usually around £50.  We make a commitment to share this commission with you if you instruct the surveyor through us.  This all helps to reduce your moving costs.

Our fee for dealing with the legals involved in moving start from as low as £200. For further details please contact davidpett@m-j-p.co.uk

Looking to Re-Mortgage? Q&A

What you should consider

When you decide to re-mortgage you will need to have a Solicitor to carry out the legal work involved. Your bank or building society will allow you to choose a Solicitor of your choice. Your choice of Solicitor will influence how quickly and efficiently your transaction is carried out.

How much will it cost?

Our prices start at £250 plus VAT

What do you need to do next?

You will need to make a mortgage application to your chosen bank or building society. We have established links with a number of Independent Financial Advisor's that are available to assist you in finding the right lender for you if you wish.

It is important for you to check how much is outstanding under your current mortgage and whether or not there is any penalty payment if you discharge your mortgage early.  If in doubt please ask your advisor or new lender to check.

Once a suitable lender has been chosen, you will be required to pay a valuation fee to your new lender who will arrange for a surveyor to visit your property, meanwhile the lender will take up financial references. If you are planning an endowment-based mortgage you will make your application for an endowment policy to an insurance company. Your lender or financial adviser will assist you with this. You may choose to use your already existing policy if you have one.

As you make your mortgage application you will be asked to nominate a Solicitor to deal with the legal paperwork. At this stage you should contact us to let us know we are to deal with the matter and to tell us the present whereabouts of your deeds. These will normally be with your existing bank or building society and it is useful if you can give us your mortgage account number.

What we will do to help you?

When you have received your mortgage offer you should return any documents that the lender sends you to sign to the lender immediately. At this stage, we would normally receive the paperwork from the lender. We shall then do the following-:

1. Check the terms and conditions of the mortgage offer to ascertain whether there are any special requirements that need to be complied with. For example, the lender may require certain work to be done to the property before the money can be released.

2. Check your title deeds to make sure they are in order and to enable us to assure your new lender that all the details of the property on the mortgage instructions are correct.

3. Conduct a local search of your property if your new lender requires it. The cost of this search varies from local authority to another.

4. Submit a `report on title' to your new lender to advise if there are any problems with the title deeds or with any of their special conditions.

5. Prepare your mortgage deed and any associated documents that your lender requires you to sign and we arrange for your signature to these.

6. Conduct a Bankruptcy Search for each borrower. This is to satisfy the Lender that you are not bankrupt. A Land Charges Search will also be carried out to ensure that no adverse entries have been made against the property.

7. Ask you what date you would like to complete your re-mortgage and then obtain a redemption figure from your present lender. The redemption figure is the amount that is required to pay your existing mortgage off. We must also redeem any other lending secured on your property.

8. Complete a Certificate on Title and also to request your mortgage advance in sufficient time for completion. You must ensure that your lender or financial adviser has put any new endowment policy "on risk".

9. Register your new mortgage at the Land Registry and finally return your deeds to your new lender after the registration is complete.

For further detail please contact David Pett on 01603877004 or e-mail davidpett@m-j-p.co.uk