Author: convey_admin

From the time the mortgage offer and completed borrower forms are received, the refinance conveyancing process takes 3-4 weeks. However, not many people understand the true duration of this process. If you’re usure, read on as we outline how borrowers can reduce delays. Here, we’ll discuss what you need to know about the duration of remortgage conveyancing.

The Procedure for Remortgaging a Home

The procedure for remortgaging a home can be rather simple. Now, we’ll give you a brief look into it:

First, you will need the services of a conveyancing solicitor once you have received a mortgage offer from your preferred lender. After that, all legal issues of the remortgage will then be handled by your lawyer. And finally, the lender’s interest in the property must be recorded as a “legal charge” by your lawyer.

The Importance of Speed

The vast majority of consumers refinance to save money on interest. The lower interest rate will take effect sooner if you complete the refinancing process. Although refinancing deals are typically completed within a month, there is always the possibility of a delay.

Three-month mortgage offers are relatively common. If the conveyancing procedure takes longer than expected, you must reapply. You may be unable to remortgage if your circumstances change or the mortgage product becomes unavailable.

Speeding up the Process

Customers frequently ask about the timeline for remortgaging. Once you’ve decided on a lender and a mortgage package, the following tips will help you speed up the process:

• Avoid ‘free legals,’ and if your lender offers it, ask for cashback. Finally, hire your own solicitor.
• Inform your lawyer that you need to get something done quickly; they will not presume.
• Inquire about any unusual terms and notify your lawyer. This gives the attorney more opportunities to address them early in the process.

If your solicitor is not on your lender’s panel, they will be obliged to subcontract the work, which will prolong the process. Then before the conveyancing procedure can begin, you must complete and sign the required papers. Or else, nothing will happen unless and until these are completed and returned to your counsel.

When remortgaging a leasehold property, check with the freeholder to see if there are any requirements. Your freeholder will not proceed with the project unless all service charges, ground rent, and insurance are up to date.

The Availability of Mortgage Funds 

If you’re releasing equity or borrowing more than the value of your current mortgage, you’ll usually get the extra money on closing day. Although, you may need more customized services and a guided approach for cases such as if you’re transferring property ownership to your child or another family member, marrying or divorcing, or transferring equity. Moreover, the legal formalities can be undertaken concurrently if you intend to refinance in conjunction with the transfer.

Conclusion

Beyond learning the technicalities on your own, it is still highly recommended that you seek the advice and guidance of experts. Since we are discussing large amounts of assets, it would be best to do this as carefully as possible, no matter how long it will take. This way, you’ll be more present throughout the entire process. It can’t hurt to take more deliberate steps!

For residential conveyancing services, Conveyancing Expert can assist you with your new home purchase. Every client benefits from our experience and is pleased with the legal assistance offered by our legal team. We constantly educate ourselves, our clients and any other parties involved in a transaction, all while offering great customer service. Call us today!

If you have some savings in the bank that’s not earning much interest, it might benefit you more to offset it against your current mortgage to reduce the interest you need to pay.

But what is an offset mortgage, and why should you consider doing it? In this post, Conveyancing Expert, your trusted company for residential conveyancing, shares more information on this topic that you’ll find helpful:

What Is an Offset Mortgage?

Simply put, an offset mortgage is one that is linked to a savings account. The balance on the savings account is used to minimize the interest charged against the mortgage to save you money. This is quite different from the typical mortgage, wherein the interest is set against the borrowed amount.

What the savings balance is for is not to repay the mortgage but to sit alongside it, serving as a provisional overpayment to lessen interests while at the same time allowing you to automatically tap into that account if needed.

How It Works in Practice

Assuming that your mortgage is £200,000 with an interest of 3%. If you have £30,000 in your savings account, you can offset it against the total mortgage amount, so you’ll only have to pay interest on £170,000 instead of £200,000. Originally, you’d have to pay interest of £6,000 per year, but if you offset, you’ll only pay £5,100, which means you get a £900 savings per annum.

If you left the savings in your bank account and it earns 2% interest, that would only amount to £600 per year, which is £300 less than what you “earn” from the mortgage. But if you choose to withdraw a certain amount of money from your linked savings account, know that the repayment will increase significantly.

What Are the Other Benefits of an Offset Mortgage?

Apart from the annual savings, offset mortgages also allow customers to either pay back the borrowed amount over a much shorter term or make lower payments monthly. This is because mortgage payments are based on the total loan amount instead of the offset amount, meaning borrowers are overpaying every month and reducing the length of time it will take them to pay off their mortgage.

Two Types of Offset Mortgages

Like conventional mortgages, offset mortgages are offered at either fixed or variable interest rates. It’s best to consult with a mortgage broker to determine the best option for you.

Are the Rates Higher with an Offset Mortgage?

Typically, rates for offset mortgages are somewhat higher than that for conventional ones by 0.2% to 0.5%. However, there has been a shift in recent years. Also, you should consider that some lenders charge a higher interest rate for those reducing monthly payments or paying back their mortgage faster.

Conclusion

Offset mortgages can offer value, especially for those higher rate taxpayers and people with significant savings who don’t need to rely on accrued interest for their daily expenses. That said, you should have enough savings on your account to cover between 20% and 25% of your total mortgage for an offset to be of value. If you are purchasing a house, you should consider speaking with a residential conveyancing expert who can help you understand all the costs associated with mortgages and related topics, including offset mortgages.

Conveyancing Expert offers quality conveyancing services in the United Kingdom. Contact us to get a no-obligation quote!

If you want to transfer the equity in your home, you may either do it yourself or find a solicitor to assist you. This process is referred to as “transferring equity.”

An equity transfer occurs when the property’s current owner transfers ownership to or from another person. In many cases, this results from a marriage or the transfer of ownership from a parent to a child.

When transferring equity, you and your solicitor must accomplish a few things. Before transferring the deeds and completing other legal paperwork, you must analyse the property’s title deeds. The deed of transfer (TR1 Form) must be registered at HM Registry. You must then complete the Stamp Duty Land Tax (SDLT) return form. It is important to note that even if there is no stamp duty to pay, you must complete the SDLT form.

You should also take note that a mortgage might complicate the situation. To help you out, we’ve listed what you need to know about the steps involved.

Complications When Mortgage Is Involved

The lender will require a remortgage for equity transfers. When equity is transferred, the ownership composition changes. The lender will need to do additional background checks on the new owners. If you have a mortgage, most equity transfers will require a re-mortgage.

It will be necessary to release any joint owners from the terms and conditions of the mortgage if they are being removed from the deeds of the property.

Adding Joint Owners of the Property

If you have just married or entered a new relationship, you may desire to include a new name on your property’s deeds to reflect the addition of that individual. The deed transfer will be pretty simple and cost-effective since at least one owner will continue to own the property.

The lender will verify the terms of early repayment and will also provide an estimate of the amount of money that will be necessary to pay off the loan in its entirety. Remortgaging may be done with the same lender or a different one if you and your new co-owner want to keep the mortgage.

Your lender will need to know that the new owners can afford to repay their mortgage in any case. Before pursuing legal action, speak with the lender and come to an agreement on a mortgage in principle (MIP), which is known as a decision in principle (DIP).

Removing Someone from Ownership by Buying Them Out

It’s possible that if you are splitting from a partner, you may need to buy out the other owner’s portion of the property. To get a mortgage, the lender will require proof that you can make the payments on your own. Your mortgage application may be refused if you fail to meet the lender’s affordability requirements.

Relinquishing Ownership of the Property as a Gift to Someone Else

Giving property to your children might lower your potential inheritance tax (IHT) liability. Take note that if the property has a mortgage, it must be paid off before the equity transfer may occur. If the property is being given to someone under 18, a ‘Deed of Trust’ must be created. The trust deed allows a trustee to keep the ownership until the individual reaches the age of 18.

Conclusion

When you jointly own a property with another person, you may find yourself in a position where you want to transfer entire ownership to either yourself or the other person. Transfers of equity may be a stressful process, but they can frequently be completed straightforwardly and practically. A professional solicitor can assist you in determining what is expected of you by your mortgage provider. A competent solicitor will be able to guide you through the process of transferring equity.

If you are looking for a reliable conveyancer in Manchester, contact us. Conveyancing Expert offers high-quality conveyancing services to ensure that your property transaction is completed with expert legal advice and help. We are devoted and honest, and we work hard to guarantee that every customer benefits from our knowledge. 

There are various reasons why you may need to remortgage your property. Your current deal may have come to an end, your home’s value may have gone up, or you may want better money borrowing terms.  

Understanding the Remortgaging Process

A remortgage changes your existing mortgage product to another for the same property. If you are taking a new mortgage from the same lender, it may be considered a product transfer that requires no new legal work. 

Residential conveyancing applies when you are switching to a different lender. Switching lenders will require a conveyancer to carry out checks and process the transfer of ownership. 

Unlike the initial process of buying a property, a conveyancing process requires less time and can be completed within three weeks.

Documents to Prepare before Approaching a Conveyancer

Once you have found a conveyancer and have ensured that their business is on the lender’s panel of approved conveyancers, you will have to collect the documents they need to work for you. 

These documents prove your identity and that you can pay off the mortgage. They also provide proof that the of your funds are not from criminal activity. These documents include the following:

Proof of Identification

This usually includes your passport or driving license and proof of address documents such as your council tax bill or utility bills. These will be checked through an online ID checking service.

Proof of Income Sources

These documents prevent money laundering by checking the source of funds you are using as the deposit for the mortgage. The documents you need will depend on your income source, such as:

• Savings: You may need bank statements showing the accumulated funds over time.

• Property Sale: You will need a copy of the sale completion statement, a bank statement showing the receipt of funds, and the name of the conveyancer who handled the sale.

• Pension: You can show a letter of confirmation from your pension fund manager.

• Inheritance: You need a confirmation from the executors of the will, which indicates how much you were left with and a copy of the bank statement showing the receipt of these funds.

• Sales of Investments: You will need documents that certify the transaction and a copy of the bank statement showing the receipt of these funds.

The Rest of the Remortgaging Process

Once these documents are ready, the conveyancer can help you with the subsequent procedures:

• Your current mortgage provider will provide the mortgage certificate with the outstanding amount
• The new lender will issue a formal remortgage offer
• Local authority searches or taking indemnity insurance
• Bankruptcy checks to ensure you are not bankrupt
• Certificate title to the new lender
• Completing the process where the conveyancer receives the money from the new lender and pays the outstanding amount on the previous mortgage. If you increase your loan, the surplus of this amount will be given to you.
• The conveyancer updates the registry to show the new charge with the title deeds at the Land Registry. This process may take several months.

Conclusion

There are various reasons why you may need to remortgage your property. If you are taking a new mortgage from the same lender, you may need no new legal work for this process. However, if you switch to a different lender, you need quality conveyancing services to ensure a smooth process.

Are you looking for a reliable conveyancer in Manchester? We at Conveyancing Expert deliver excellent and efficient legal advice and service. Get a free quote today!

If you’re ready to become a property owner, then buying a flat for the first time can be a little too overwhelming, especially if you know so little about what goes into the process of buying a property. One of the first things you should learn is that buying a flat is quite a bit different from buying a house. Understanding the different aspects of the process can help you to tackle it with confidence, so whether you’re buying your first flat or you’ve bought many already, take a look at our guide to help you through it.

Leasehold vs Freehold

Understanding if a property is leasehold or freehold is crucial for anyone planning to buy a flat. Leaseholders own their flat, but they do not own the land it sits on. In this scenario, a leaseholder will acquire a property from a freeholder. If you are a leaseholder, you will enter into a contract with the freeholder who owns the building and property. On the other hand, a freehold grants a person or group complete control over the property and the land. The freehold contains all past, present, and future rights to the land, while a leasehold limits these rights up to a specified time.

A lease is a contract. The details of a lease typically include things like who is responsible for various maintenance issues, the monthly payment amounts, permission to make changes to your place, and any restrictions on things such as pets or subletting.

Unfortunately, there are some unscrupulous landlords who will charge unjustifiable fees to extend the initial contract. However, if you have already taken out a mortgage for your house or flat, you’ll need to read what your deed states to learn more about the repercussions if your lease is coming to an end. 

Can a Flat be Freehold?

A flat can be freehold, but only a few are actually sold to the public in this way. The majority of mortgage lenders don’t allow a flat’s freehold to be used as security. Instead, you can buy a share of the freehold if you purchase a leasehold property. The cost of doing this depends on a couple of things, such as the length left on the lease, and it adds value to your property by allowing you to extend the lease to 999 years free of charge. You get more control over your property when you own a share of the freehold.

Should I Buy a Flat That I Leasehold?

Freehold properties are usually considered more desirable than leasehold ones, but you can still buy a flat that you lease. It’s worth paying attention to how long the lease lasts. Leases lasting more than 80 years can become significantly more expensive than shorter leases. In fact, any lease nearing 80 years in length can become much more expensive to renew.

Right to Manage

A lease can be expensive, but there’s another option called Right to Manage. You can apply for the Right to Manage for free if you’re one of the leaseholders, allowing you to get more control over your building. Basically, the Right to Manage allows you to take over the responsibilities for some of the work, so you don’t have to pay the ground rent. You will still have to pay some maintenance costs.

Conclusion

Buying a flat is a difficult decision to make and a complicated process to go through. But knowing what you’re up against and the many considerations you have to know before making any purchase can be a great advantage.

Conveyancing Expert is an online conveyancing practice providing quality conveyancing services. As a team of legal professionals, we make sure to guide all our clients throughout the entire process. Reach out to us when you need residential conveyancing in the UK. Get a free conveyancing quote today!

Having to move is very stressful. While the idea of having a new beginning may be fun, the entire process of packing and processing papers may get on one’s nerves. Moving is never an easy thing to do, and you may end up forgetting some things to do along the way.

This guide is here to help ensure that you have not forgotten anything and you have done everything prior to your move.

Talk to Your Landlord

If you are renting, make sure to talk to your landlord first before suddenly moving out. Ensure that you give them a heads up and review your contract before you hand in your notice. Some renting contracts may have specific clauses on moving out, so it is important that you do not violate them.

Work with a Moving Company

It is unlikely that you will be able to move your things all on your own. Try to find and talk to a reputable moving company beforehand. Ensure that they are aware of all your needs and the items that you have.

Have a discussion with them about fragile and important items. Also, try to get insurance on your items when moving. This will ensure that they will be covered in case something breaks or gets lost.

Changing Your Personal Details

When you are nearing your move, you may as well start working on updating your addresses on official papers and IDs. It is also important to inform your workplace, your family, banks and more. This is to ensure that any important things get mailed to your new address and so that they know where to find you.

Start Packing Ahead of Time

Some people may procrastinate their packing to the very last minute. However, this may only add up to the stress that you may have. This can also result in you forgetting to pack up certain items.

Start packing ahead of time—at least two weeks before. If you can start a month before, even better. This will give you enough time to go over your items several times to ensure that nothing gets left behind. You will need to start packing things that you are sure not to use within those next few weeks to avoid having to unpack again for certain items.

Make Sure to Talk to Your Lawyer

If you are moving into a home that you have bought, you have to make sure that all of the legal documents are in place. While some people may just hurriedly sign and clear some papers, getting legal advice from a professional may be important to ensure that you do not run into any issues later on.

If you do not have a lawyer or do not know one, it is recommended that you get in contact with a company that offers trusted conveyancing services, such as Conveyancing Expert. They will make sure that all the legalities are in place to make your move smoother.

Conclusion

Moving is tough and can be stressful. You have to consider a lot of things, such as informing your landlord, packing, booking a moving company, updating addresses on important documents and more. However, with our checklist, we hope we have made it a little bit easier. 

If you are worried about the legal documents of your new residential property, work with us at Conveyancing Expert for trusted conveyancing services! Worry less about the legal aspect and you can focus on your new beginning. Contact us today for a no-obligation quote!

Whenever you want to process paperwork involving the transfer of a property’s ownership, you would turn to a reliable firm with their most trusted conveyancing solicitors. Besides the fact that you can get great value for your money by making the right decision, you will also be experiencing little to no hassle at all.

The thing about picking the right firm and conveyancer is that it requires a certain level of research and observation to make the right decision. If you fail in this regard early on, you may end up with paperwork that would take longer to finish. This can put your property plans on hold, whether you are the buyer or the seller.

In such a case, it is only right for you to make the most out of picking the right solicitor for the job. If it happens to be your first time going through this process and you have no idea what indicators to look out for, no need to worry. We have listed some of the non-negotiable qualities that a good conveyancing solicitor must have.

Great Communication Skills

A conveyancing solicitor knows how to explain all the details without getting too technical in their terms. Not only are they proficient in explaining the terms, conditions, and stages of the conveyancing process, but they are also skilled in summarising it all. Their ability to explain complex issues in general terms is essential, especially since not all home sellers and buyers are familiar with real estate jargon. You may have countless conveyancers to choose from as of now, but are they great communicators?

Pick a conveyancer who can make you and the other party understand the current stage of the process simply and never hesitate to receive your questions.

Great Attention to Details

Every conveyancing process has a few technicalities under its belt that must be settled before it may even proceed. If your conveyancer can explain these important details without missing out on anything that may haunt you and the other involved parties later on, then you have chosen the right solicitor for the job. The truth is that not all people are born to be good conveyancers. They must have a keen eye for the rules and regulations of the job since any infractions, even those done by mistake, may delay the transfer of property between two parties.

A conveyancer must explain this all to the buyer and the seller so that the process and paperwork may all go smoothly.

Familiar with Your Local Area

Suppose that you were able to find a conveyancer with the first two qualities but has no prior knowledge of your local area or the area where the property is situated. What do you do? Of course, you must find a much better option. No matter how skilled or experienced they are, so long as they have limited knowledge of your local area, they may not be aware of the rules and regulations that apply to certain areas.

By working with a conveyancer who very much knows the regulations within a specific state, region, or community, they may very well apply advantageous tricks that may help you buy or sell a property faster.

Conclusion

These non-negotiable qualities should be a part of your conveyancer’s repertoire to be able to do their job efficiently. Being familiar with the local area is one thing, but what would even make them more formidable is their great communication skills and deep attention to detail. By having those qualities, they may as well enable the home buyer and the seller to experience a smooth conveyancing process.

Pick the right conveyancer, and you will never have to deal with problems that most property buyers and sellers often come across when handling their paperwork.

If you are looking for very reliable residential conveyancing solicitors in Manchester, look no further than our team of experts here at Conveyancing Expert. We offer high standard yet low-cost conveyancing for all clients looking to buy, sell, re-mortgage and transfer equity. Contact us today and let us handle all your conveyancing paperwork for you.

Moving can be a stressful time. Even when you’re finally setting up in your new home and you’re ready to rest, you need to set up various things to start getting comfortable. You may think the brunt of work should be over now, but you’ll be able to enjoy your new place much better if you get some big steps out of the way first. 

To make things easier on you, simply work your way through this checklist of essential things to do right as you move.

Make Sure All the Paperwork is Settled

The last thing you need is legal issues, especially since a move will already put enough on your plate. Make sure you have a residential property lawyer to help you sort out all of your ownership paperwork. This is necessary whether you are selling your previous home, buying a new home, or both.  

It’s also a good idea to ensure you’ve got the billing system and information in order at your new place. Talk to the previous owner to make sure utilities are billed to you and that there is no balance left from their time there. 

Sweep Through the Property

This means a visual sweep, of course. Simply do a thorough inspection as you walk through the entire property once more. Do this before unpacking anything and setting up so you can get a feel for the space and make sure that everything is as it should be. 

If you have specific agreements with the previous owner, this is the time to make sure they came through. This can reveal any issues that weren’t present in your initial viewing and any possible breaches against your sale contract.

Conduct a Deep Clean

Now, you can do the literal clean sweep. A good and thorough deep cleaning will help you make sure that everything is spick and span. It’s more extensive than a general cleaning, so you can rest assured that any built-up germs and dirt will be tackled. This should also give you a great clean slate to start with.

Double Check the Plumbing and Electrics

You’ll want to ensure that all the outlets, wiring, plumbing and lighting fixtures, switches, and pipes are working as intended. You should also check out where your water valves and fuse box are and make sure they are accessible. 

Figure Out Your Layout

You’ll have a much less painful time sorting your furniture and belongings if you have already mapped out your layout for each room. Consider where each item will be placed so you can put the corresponding boxes in the right rooms. You should also have an idea of the placement so you can just haul the furniture to the actual area where it will be set up. 

Install Any Pet or Child Proofing Essentials

If you have any pets or children, start installing all your proofing as needed. You can do this quickly and set up a zone for them to stay in while you’re still setting up some of the more hazardous things like kitchen chemicals, sharp tools, and breakables.

Conclusion

By completing all of these tasks right away, you’ll be saving yourself from the headache of problems cropping up in the future. You protect yourself from unexpected hiccups when you tackle everything before starting to settle in. Once you’ve got everything done, you can finally relax at your new home sweet home.

If you need sound advice regarding property transactions and ownership during your move, leave it to the Conveyancing Expert. Contact us now and get a free conveyancing quote with no obligation. 

Looking at different houses as you go through the real estate buying process can be fun! However, there is a level of seriousness about this part of the house-hunting process. It is crucial that you ensure that the home you eventually choose will be fully-functioning and will be the right fit for you and your family.

It may seem overwhelming at first, especially if you are a first-time homebuyer. This article has outlined the specific things you should look for when you inspect a property. Hopefully, after reading this, you will be able to make an educated and informed decision about the home you will buy.

Important Things To Spot When Viewing A Property for Sale

1 – Aspect

The first thing you need to look for is the aspect of the property. What aspect of the house is this? Is it located facing the East, the South, the West, or the North? Knowing the aspect of the property will allow you to understand how the sunlight will come into the house. Are you more concerned about having sunny rooms? Or are you more concerned about the temperature of the room? Understanding the aspect of the property will determine how you design the house or choose the layout of each room. 

2 – Security

The security of the property is also very important. Make sure the property is gated, and do not forget to check if there are security features like cameras. 

3 – Damp

Damp is a word you should look out for when viewing a house for sale. When a house has damp, it means that the mortar used in the construction of the house has been damaged or weakened to a point where the walls are less able to retain moisture. If a house has damp, it will also have a mildew-type smell in the air. This is a sign that the house was built poorly and needs to be repaired. 

4 – Leaks

Leaks in a house are a major concern. When a house has a leak in a certain area, it means that a part of the house is damaged and water is coming in from the outside. The leak should be fixed right away to avoid further damage. 

5 – Plumbing

Plumbing is a crucial element in a house. A good property should have a functioning and in-tact set of pipes. Take a look at the water pump and see if it works.

6 – Structure & Stability

Make sure the property is structurally sound. Check the foundation for cracks, unevenness, and signs of structural instability.

7 – Kitchen

Most of us spend a good amount of time in the kitchen. Make sure you inspect the kitchen thoroughly. Check for any deficiencies or issues with the kitchen, like the absence of a missing cabinet or the absence of a working exhaust fan.

Conclusion

Real estate can be an intimidating process, but it doesn’t have to be! Take the time to learn how to inspect your house, ensure that everything is intact and that there are no major issues to be found. This will allow you to make an informed decision about the home you are buying.

Whether you are a first-time buyer or have bought a home before, you need to know the legal fees for buying a house. A skilled conveyancing solicitor from Conveyancing Expert will be able to help you out! Give us a call, and let’s get the process started today!

When you’re a few months or years into your mortgage, you may encounter the term “negative equity” and wonder what it means for your loan. Negative equity is what happens when your outstanding mortgage exceeds the value of your property. According to Property Reporter, this has affected nearly half a million UK properties. Additionally, some people are in negative equity without even realising it.

The good news is that you can take advantage of various options to reduce your negative equity and hike up your property’s value. Here’s what you need to know about it and how it affects your mortgage:

What Does Negative Equity Entail?

The equity you have in your property is the difference between its current value and the outstanding mortgage you have. If you bought your house for £250,000 and paid a deposit of £25,000, then you’ll have 10 per cent equity in your home. Many homebuyers hope that their house will increase in value as they repay the mortgage, which means the equity value will also climb. If house prices dip, they’ll risk negative equity, as the property’s value becomes less than the mortgage loan they obtained.

How Can You Tell If You’re in Negative Equity?

People are usually unaware that they’re in negative equity. Still, you can easily find out by acquiring a valuation of your property and comparing it with how much mortgage you have left to pay. If your outstanding mortgage is higher than your property’s value, you are in negative equity. If this makes you consider selling your house, be sure to talk to a conveyancing solicitor to know your options.

If you buy your house without a mortgage and pay it in full, however, you cannot be in negative equity, which means you are safe from this dip in valuation. Unfortunately, this isn’t an option for many aspiring homeowners due to the sheer cost involved.

Who is Vulnerable to Negative Equity?

Homeowners more likely to be at risk of negative equity live in an area that has been hit dramatically with plummeting house prices while having a 95 or 100 per cent mortgage. If your mortgage is interest-only and you’ve overpaid for your house when you first got your mortgage, you are also at risk of negative equity. 

How Does Negative Equity Impact Your Mortgage?

If you’re in negative equity and want to remortgage, you’ll be hard-pressed to find a lender who will approve it. You must typically get out of negative equity before you can remortgage, though this all depends on what mortgage you have.

For instance, it may be more difficult to remortgage if you have negative equity on an interest-only mortgage. While you can opt to overpay on your mortgage if your lender permits it, you can opt to wait for the housing market to recover.

On the other hand, if you have a fixed-rate mortgage and you’re meeting your monthly payments, it is best to continue doing so until you’ve reached the end of your term. However, if you’re still in negative equity when the end of the term is approaching, consider overpaying or figuring out your negative equity before you switch to a new deal.

What is a Negative Equity Mortgage?

If there aren’t feasible ways to pay off your negative equity, you may benefit from a negative equity mortgage. You can move houses without paying your negative equity right away, although these loans are subject to early repayment fees since you’ll be terminating your current mortgage early. You are free to apply for a negative equity mortgage even if your present mortgage is with another lender. Still, your new mortgage will likely include other additional fees, mainly if the interest rates are higher.

Conclusion

Being in negative equity is out of your control, as it is subject to the housing market, which fluctuates. The good news is that there are a few options you can pursue to reduce your negative equity and put yourself in a more favourable position, returning to positive equity.

Conveyancing Expert offers quality conveyancing services you can use when buying a home, remortgaging, or trying to improve your negative equity. We deliver excellent and efficient service to ensure your property transaction goes smoothly. Get a free, no-obligation quote from us today!