When you’re remortgaging a Help to Buy or Shared Ownership property, and the mortgage offer has been issued, several key steps must be followed to ensure a smooth process. Here’s what you need to know:
1. Review the Mortgage Offer
Check Details:
Ensure that all the details in the offer match your expectations, including the interest rate, term, and any fees. If anything seems off, contact your lender or broker immediately.
Legal Advice:
It’s advisable to have a solicitor or conveyancer review the offer. They can ensure that there are no hidden clauses or terms that could affect your decision.
2. Instruct a Solicitor
Legal Process:
For both Help to Buy and Shared Ownership, you’ll need a solicitor to handle the legal aspects of the remortgage. The solicitor will work with the lender and, if applicable, the housing association.
Help to Buy Redemption:
If you are repaying your Help to Buy loan, your solicitor will coordinate with the Help to Buy agent and handle the redemption process.
3. Valuation and Survey
Lender’s Valuation:
The lender will have already conducted a valuation of the property, which is typically a requirement before issuing the offer.
Independent Valuation (if required):
For Help to Buy, an independent valuation may be necessary to calculate the amount needed to repay the equity loan. This valuation must be conducted by a RICS-registered surveyor.
4. Arrange for Redemption of Help to Buy Loan (if applicable)
Settlement Figure:
The Help to Buy agent will provide a settlement figure, which includes the repayment amount of the equity loan.
Redemption Process:
Your solicitor will arrange for the funds from the remortgage to be used to pay off the Help to Buy loan. If you are staircasing in a Shared Ownership property, the solicitor will arrange for the purchase of the additional share.
5. Liaise with Housing Association (Shared Ownership)
Approval:
The housing association must approve the remortgage and any changes in ownership shares. They may also need to be involved in the valuation process if you are staircasing.
Lease Adjustments:
If staircasing, the lease may need to be updated to reflect your new ownership level.
6. Complete the Legal Work
Exchange of Contracts (if applicable):
This is less common in remortgages but may be necessary if you are staircasing or buying out the Help to Buy loan.
Transfer of Funds:
On completion day, your solicitor will arrange the transfer of funds from your new lender to pay off your existing mortgage and, if applicable, the Help to Buy loan or additional share in a Shared Ownership property.
Registration:
The changes will be registered with the Land Registry, reflecting your new mortgage and, if applicable, your new ownership share.
7. Post-Completion Tasks
Inform Stakeholders:
Your solicitor will inform all relevant parties, including the lender, housing association, and Help to Buy agent, of the completion.
New Mortgage Payments:
Your new mortgage payments will commence as per the terms in the offer.
Keep Records:
Ensure you keep all documentation related to the remortgage, including the mortgage offer, completion statement, and any correspondence with the lender, solicitor, and other parties.
8. Consider Financial Implications
Budgeting:
Ensure you budget for any changes in your monthly payments, especially if moving to a fixed or variable rate.
Future Plans:
Consider how long you plan to stay in the property and whether this remortgage aligns with your long-term financial goals.
9. Communicate with the Help to Buy Agent (if applicable)
Final Statements:
After repayment, the Help to Buy agent will provide a final statement confirming that the loan has been redeemed.
End of Help to Buy Participation:
Once the loan is repaid, your participation in the Help to Buy scheme ends, and you’ll own your property outright or as part of a Shared Ownership scheme, depending on your situation.
Conclusion
Remortgaging a Help to Buy or Shared Ownership property after the offer has been issued involves a series of legal and financial steps. Working closely with your solicitor and ensuring all details are carefully reviewed will help ensure a successful transition to your new mortgage arrangement.