How to switch your mortgage
You have chosen to switch your mortgage to a new lender, these are the steps to be taken, as follows : -
1. A mortgage application form has to be completed and submitted, along with certain documents, such as bank statements, payslips or proof of identity, which will support your application.
2. At the time of your application a valuation fee will be issued, unless this is free. If it is not free then your lender may refund the fee after completion, depending on the deal and lender. An arrangement fee is often installed as well, often known as a booking fee or application fee, and also a mortgage indemnity fee if you are borrowing a high proportion of the value of your property.
3. As long as the lender is prepared to lend you the money, then a mortgage offer will be issued. If you are not happy with the deal then simply sign and return it. You have no ties to the offer so you are able to pull out at any time, but remember that you will loose all non-refundable fees that you had to pay.
4. Now that all forms are complete, the legal work can start. You can choose from a panel of solicitors and licensed conveyers that work for the lenders, or you may wish to appoint your own. Who ever you may choose will act on the behalf of both you and the lender.
5. The solicitor or licensed conveyor will ask your existing lender to send the title deeds and a redemption figure to your new lender. These figures will include the amount left to pay on your mortgage plus any fees and penalties. They will also carry out any necessary searches, such as a local authority search.
6. A completion date for the re-mortgage will be made.
7. You will be asked to sign the mortgage deed.
8. A report will be submitted to your new lender from your solicitor concluding conformation that you have a proper title to the property, and that it’s safe for them to lend.
9. Your solicitor will request the funds from the new lender, and on the day of completion, these will be sent to your existing lender.
10. If you have borrowed extra funds, then your solicitor will release these to you on, or shortly after completion.
If you have a mortgage dating from before October 1995, and you loose your job, then you may be entitled to help with your interest payments from the Department for Work and Pensions (DWP) If you switch, the post 1995 rules apply – you wouldn’t be eligible for DSS help towards your interest payments until you have been out of work for at least nine months.