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Remortgage conveyancing is the legal term most commonly used in the U.K. for refinancing property using the same property as security. A conveyance is the transfer of legal title to property. Remortgage is the substitution of one mortgage lender for another, where the new lender pays off the old lender and places a new principal mortgage on the property.
The most common use of remortgage conveyancing is to refinance a home. A homeowner would decide that he wants to replace an existing mortgage with a new mortgage, perhaps with a better interest rate or a different loan term. He would apply for a new mortgage with a different lender, secured by the same property. The proceeds from the new loan would be used to pay off the existing mortgage on the property. Then, the home would have a new first mortgage and the homeowner would be responsible for making mortgage payments to the new lender.
This process is not restricted to private homes. Remortgage conveyancing can apply to any property, including commercial property, that undergoes a refinancing. The linchpin for applicability of the term is that the original property must be the security for both loans; in other words, it has to remain the asset being mortgaged. If a borrower paid off the existing mortgage on a property with a miscellaneous non mortgage-based loan or with a mortgage on a different property, the original property would be refinanced but the transaction wouldn’t qualify as a remortgage.
The term is a uniquely British way of labeling this process for contemporary purposes. There are professionals in the U.K. called remortgaging conveyancers, or conveyance solicitors, that exclusively handle these types of transactions. Although both terms and the overall concept are easily definable in any legal system based on English common law, remortgage conveyancing is not how this transaction is referred to in most jurisdictions. In the U.S., for instance, this practice is referred to as mortgage refinancing.
Remortgage conveyancing is a complex legal process and usually requires professional assistance. The borrower in the remortgage process must qualify for the new mortgage and complete the same steps he had to complete when applying for the original mortgage on the property. This includes credit checks, title search, and preparation of a new deed. Added to the process is timing of the payoff of the existing mortgage and the recordation of a satisfaction of mortgage before the new title insurance can be issued and the new mortgage recorded.
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