Very simple re-mortgage question

JoeA81

Re-mortgaging:

If our new mortgage providor has agreed to lend us £X, and we then pay down our current mortgage to just below this, £X - £1000, on completion what normally happens?

Does our new mortgage providor just lend us £X - £1000 (so the amounts match up perfectly - to pay off the old providor), or do they pay our old mortgage providor the full amount of £X, and then we have to reclaim the £1000 from our old mortgage providor, as this will have sent our old mortgage account positive?

Cheers,

JimmyTheWig

Have never actually done it (have only ever remortgaged with the same company, so was never a discrepancy) but I would certainly imagine that the new mortgage will be for the full amount that has been agreed.
I would like to think that the old mortgage company would get the balance outstanding (taking daily interest into account) and you'll get the difference in your current account.

GMS

Your agreed advance will be sent to the solicitor dealing with the conveyancing.

Solicitor will request a redemption figure from current lender and send the amount to them to release their charge.

If there are funds remaining your solicitor should send a cheque or transfer funds to your nominated account.

If there was a shortfall the solicitor would request additional funds from you.

JimmyTheWig

GMS wrote: »

Your agreed advance will be sent to the solicitor dealing with the conveyancing.

That was my first thought.

But I think that this is a re-mortgage rather than a house move. So there will be no conveyancing. (I believe!)

GMS

There will be conveyancing if a change of lender.

How else can one charge be removed and a new one added?

JoeA81

Cheers GMS, that answers my question. So my solicitor will be the one who owes me money, not the mortgage companies.

Thanks.

JimmyTheWig

GMS wrote: »

There will be conveyancing if a change of lender.

How else can one charge be removed and a new one added?

I don't know.
Like I said , I've never done it before.

Does it not make the whole process quite expensive?

JoeA81

JimmyTheWig wrote: »

I don't know.
Like I said , I've never done it before.

Does it not make the whole process quite expensive?

My new mortgage is with First Direct, and one of the reasons I went with them is because they offer free legal work. So all I've paid is the £99 mortgage fee and £99 for a basic valuation - And I'm making back £100 by switching my current account to First Direct!

JimmyTheWig

Ahh. Yes, all making sense now.

JoeA81

Well..finally got a reply to the message I send to FD yesterday (which was why I asked on here).

They said:
"I can confirm that your limit will open as £X, however, your balance may be less, depending on what the redemption figure is, you will only pay the interest on the balance as opposed to the limit."

So it looks like they will reduce their advance to match the redemption figure? Ah well, that's easier for me.