Buying a home, moving house or even just remortgaging can be one of the most stressful things you’ll ever have to do.
Never mind the sheer complexity and emotional intensity of the transaction there’s a whole swathe of issues to add to the pressure, whether it’s your financial circumstances; getting approved for a mortgage; market conditions; property chains; uncertainty and delays; survey results; unexpected issues; emotional investment and personal attachment; paying tax and the entire legal process.
As the process of buying a home normally involves multiple parties, such as estate agents, mortgage brokers, surveyors and solicitors any delay or inefficiencies on their part can slow the whole process down and to make matters worse you have no or little control over their actions.
There’s often pressure to make quick decisions and it’s easy to doubt whether or not you have made the right choice but there are things that you can do to make it easier – not just for yourself but for everyone else too.
Once you’ve researched the buying process, understand and have accounted for the costs involved and prepared your finances you can take a look at the legal basics to help smooth the process even further.
Conveyancing is the word used for the legal process of transferring property ownership – a process in itself that can be lengthy and subject to delays, often due to issues with searches, surveys or incomplete documentation.
Understanding legal terms and processes can be overwhelming, especially for first-time buyers. But it doesn’t have to be.
Before looking to take out a mortgage to either purchase a new property or refinance your existing property to would be prudent to make sure you are prepared to ensure the process moves along smoothly.
Your conveyancer is required to check your identification to meet their anti-money laundering regulations to ensure no fraud is taking place.
What documents do I need to apply for a mortgage or remortgage?
Firstly, you will need in-date photo Identity document such as a passport or driving licence. This identification should match your mortgage application when this is made.
Secondly your will need to prove your current address by way of two recent utility bills, such as a bank statement, water, gas and electricity bill or a letter from HMRC. A mobile phone bill is not acceptable proof of address.
It is worth noting this proof of address must be no older than three months old.
Why is this important?
Property fraud has become an increasing problem in the UK and often a target for criminal activity to launder money.
When putting down a deposit to buy a property or during a re-mortgage you may be paying of an element of this to reduce your mortgage balance the solicitor is required to establish the source of the funds.
Initially your solicitor will ask for up to six months’ worth of bank statements. They need to show the funds accruing over time.
It may be that your deposit is coming from a family member or friend, this is known as a ‘gifted deposit’.
The solicitor will need to carry out the same identity and proof of address checks they have done for you together with up to six months of bank statements to show where the deposit has come from. In addition, the person gifting will be asked to sign a declaration to confirm the money is a gift and not a loan that would have given them an interest in the property.
Here are the legal basics you need to know and actions to take before taking out a mortgage or remortgaging:
Mortgage Agreement in Principle (AIP): This is a document from a lender stating how much they are willing to lend you based on your financial situation. It will help you understand your budget and shows sellers that you are a serious buyer.
Property Search: Use estate agents, online property portals, and local advertisements to find suitable properties.
Offer Submission: Once you find a property, submit a formal offer through the estate agent.
Instructing a Solicitor or Conveyancer: Hire a qualified solicitor or licensed conveyancer to handle the legal aspects of the purchase. They will then conduct searches, handle contracts, provide legal advice, and manage the transfer of ownership.
Local Authority Searches: Check for any planning issues, restrictions, or potential developments affecting the property.
Environmental Searches: Assess risks from flooding, contamination, and other environmental factors.
Title Search: Verify the property’s legal title to ensure there are no ownership disputes or restrictive covenants.
Survey Types: Depending on the property’s age and condition, choose between a Homebuyer’s Report or a Building Survey. This should highlight any structural issues or necessary repairs, helping you avoid costly surprises.
Exchange of Contracts: Both parties sign the contract, and you pay a deposit (usually 10% of the purchase price).
Binding Agreement: At this stage, the sale becomes legally binding and a completion date is set.
Completion: Final Payment: your solicitor will transfer the remaining funds to the seller’s solicitor.
Transfer of Ownership: You receive the keys, and the property legally becomes yours.
Stamp Duty Land Tax (SDLT): Pay the required stamp duty to HM Revenue & Customs (HMRC) if applicable. Your solicitor typically handles this. SDLT rates vary depending on the property price and whether it’s your first home or an additional property.
Registering the Property: Your solicitor will register the property in your name with the Land Registry, officially documenting you as the new owner.
Remortgaging
Check Terms: Review the terms of your current mortgage, including any early repayment charges or penalties. Your broker can help you do this.
Outstanding Balance: Know your outstanding mortgage balance to compare with new offers.
Shop Around: Your brokers can help you compare remortgage deals from various lenders to find the best terms and interest rates.
Lender Valuation: The new lender will conduct a valuation to assess the current market value of your property.
Instruct a Solicitor: Hire a solicitor to manage the legal aspects of the remortgage, including discharging the old mortgage and registering the new one.
Title Check: The solicitor will check the property title to ensure there are no issues affecting the remortgage.
Settlement: The new lender pays off the existing mortgage, and you start repayments on the new loan.
Registering Changes: The solicitor updates the Land Registry with details of the new mortgage.
YOUR PROPERTY MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.
Your initial mortgage appointment is without obligation. We normally charge a fee for our services; however, it is payable only on the submission of your mortgage application. The fee will depend on your circumstances but our standard fee is £549. Complex cases usually attract a higher fee. We will discuss and agree the fee with you prior to submitting any mortgage application.
Please be aware that the information provided within these archives has been pre-published, as of the date published on each article. The information contained within, including references to taxation, legislation, regulation, or any other issues or concerns may no longer apply.
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