Remortgage transfer is a UK legal term for refinancing property using the property as collateral. It involves replacing one mortgage lender with another and is commonly used to refinance homes or commercial properties. The process requires professional assistance and includes credit checks, title searches, and preparing a new deed. The term is unique to the UK, while in the US, it is referred to as mortgage refinancing.
Remortgage transfer is the most commonly used legal term in the UK for refinancing property using the property itself as collateral. A transfer is the transfer of legal title to the property. Remortgage is the replacement 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 the remortgage transfer is to refinance a home. A homeowner would decide that they want 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 of 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 paying the mortgage to the new lender.
This process is not limited to private homes. The remortgage transfer can be applied to any property, including commercial property, undergoing a refinance. The crux for the applicability of the term is that the original property must be collateral for both loans; in other words, the mortgaged property must remain. If a borrower paid off the existing mortgage on a property with a non-mortgage miscellaneous loan or a mortgage on a different property, the original property would be refinanced but the transaction would not qualify as a remortgage.
The term is a uniquely British way of labeling this process for contemporary purposes. There are professionals in the UK called remortgaging transporters, or transport solicitors, who handle these types of transactions exclusively. While both terms and the general concept are easily defined in any English common law legal system, remortgage transfer is not how this transaction is defined in most jurisdictions. In the United States, for example, this practice is referred to as mortgage refinancing.
The remortgage transfer 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 he applied for the original mortgage on the property. This includes credit checks, title searches, and preparing a new deed. Adding to the process is the timing of paying off the existing mortgage and posting a satisfaction on the mortgage before the new title insurance can be issued and the new mortgage registered.
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