GUIDE TO REMORTGAGING
Your solicitor will write to your lender and ask for a mortgage redemption statement and the title deeds. At your lender’s request, a Local Authority Search may be applied for.
STEP 2: Receive mortgage offer
Once your new mortgage application has been finalised a mortgage
offer will be issued. By this time the title deeds and searches should
have been received.
STEP 3: Sign the mortgage deed
A completion date is set for the earliest convenient date and the
mortgage deed sent to you to sign. Your lender is asked for an
updated mortgage redemption statement.
STEP 4: Completion day
As soon as the money is received from your new lender they will send
the amount outstanding to your existing lender and pay off the
mortgage. Any balance due to you is also sent to you on the same day.
STEP 5: After completion
As soon as the Land Registry has updated their records, your title
information document will be forwarded to the new lenders.
AUCTIONS
A property auction can be hazardous for the inexperienced buyer.
As soon as the auctioneer accepts your offer, you are bound to
complete, generally within 28 days. You will have to pay a 10%
deposit at the auction, which you will lose if you withdraw.
So before you bid make sure that:
- All the legal formalities including searches have been dealt with
- Your mortgage has been arranged
- You have the results of any private survey
- The deposit is ready
BUYING JOINTLY
If you are buying your home together with another person, it may be
a good idea to be joint owners.
The are two different sorts of joint ownership –
Joint tenancy or tenancy in common
With a joint tenancy, when one of the owners dies, his or her share automatically passes to the survivor. Joint tenancies are normally used by husbands and wives. However, on the death of a tenant in common, his or her share in the property will not go automatically to the other joint owner. Instead, it passes under the deceased person’s will or, if there is no will, under the rules of intestacy. Tenancies in common are often suitable where, say, a brother and sister buy a property or where two people buy in unequal shares or where there are several purchasers or where they are business purchasers.
STAMP DUTY
When you buy your home, you have to pay
stamp duty if the price of the property is
more than the statutory amount, currently
£125,000. If this threshold is exceeded,
stamp duty on a sliding scale is paid on
the total purchase price. The rates are:-
1% up to £250,000
3% above £250,000
4% above £500,000
CAPITAL GAINS TAX
Capital gains tax may be payable when you
dispose of an asset for more than its cost
price. Fortunately, a person’s main residence
is normally exempt from this tax. However,
if you have more than one property or you
run a business from home or let part of your
property, a capital gains tax liability may arise.
INHERITANCE TAX
Inheritance tax is payable on virtually all
assets including a home. It is payable on
death or at a reduced rate for gifts made
within 7 years of death.
Please contact our private client and tax department for more information.
ACTION CHECKLIST
There are a great many things that need to be done before you can move into your new home. The following is a checklist of some of the main points:
- Make your offer “subject to contract”
- Give your solicitor’s details to the seller and the estate agents, and inform your solicitor of your plans
- Apply for a mortgage
- Instruct a private surveyor if needed
- Make arrangements for the deposit
- Agree on a completion date (usually 7-14 days after the exchange of contracts)
- Check insurance arrangements