Do I Need a Solicitor for My Remortgage?

If you’re looking to remortgage your home, you might be thinking back to when you first obtained a mortgage and wondering if you need a solicitor again.

The good news is that you don’t always need a solicitor for a remortgage.

If you’re staying with the same lender and you’re simply selecting a new remortgage deal, then you won’t need a solicitor (as this is known as a product transfer).

You also won’t need a solicitor if you need to borrow extra money from the same lender.

Yes, you do need a valuation with a remortgage, but it differs slightly depending on whether you stay with your current lender or switch to a new remortgage provider. Read our comprehensive Guide to Valuations for more details.

If you stay with the same lender, they may use an AVM (Automated Valuation Model) to determine the value of your house, which can be quite quick. This model requires a good amount of recent sales data for houses in your area, which will determine whether it’s used or not. 

If you change to a new lender, they might use an AVM or a qualified valuer to assess the market value of your house. As with “free legals”, you may be able to obtain a “free valuation” with some new remortgage products, but it’s important to check. 

Checking the fees, cost of borrowing and any other incentives like cashback is essential to properly compare different remortgage deals. 

The reason you need a valuation for your remortgage is because the company lending you the money needs to understand the risk (amount you want to borrow) in comparison to the value of the house. As you would expect, low risk would involve borrowing a small amount against a house worth 4 times that amount. High risk would be the opposite: borrowing a large amount against a house that’s not worth much more than the mortgage. 

Your level of risk determines whether you can apply for certain remortgage products. You can see this by looking for minimum LTV (loan to value).

Here’s an example: 

• House value: £200,000
• Amount to borrow: £150,000
• LTV: 75%

You need equity to obtain a remortgage as opposed to a deposit, which you would have need you took out your first mortgage.

Unlike a cash deposit (money in your bank), equity refers to the amount of your property that you own (without debt) as part of the total value of your house.

As mentioned, this is related to how much you’d like to borrow in comparison to the value of your property (LTV).

You do have the option, however, to pay off some of your mortgage when remortgaging. If you’ve managed to save a little, it’s worth discussing this with a remortgage adviser.

Paying off some of your mortgage can help you pay less interest (cost of borrowing) over time and may even allow you to pay off your mortgage a little earlier.

You may need a survey as part of any new agreement for a remortgage, but it’s less likely if you stay with the same lender. There are many types of survey, each with a different level of detail.

The company lending you the money will assess the age and type of house, and this will determine the type of survey required (along with the construction material). A remortgage lender will consider certain construction types as riskier than others when it comes to lending you money.

It’s strongly advised that you talk to an adviser about any new financial agreements concerning your property.

Any decision that concerns money needs careful consideration and you’ll need to understand all the facts and what options you have.

If we take some of the above examples, a remortgage broker will understand:

• Your finances and current circumstances
• Whether you need a solicitor or valuation, and which products offer “free legals and valuations”
• What equity you have and be able to calculate your LTV to see your options
• What the total cost of borrowing will be and whether a remortgage product is actually the best deal for you

To get in touch with one of our expert advisers, call us today on 0808 239 9021 or enquire online.