September 15, 2015

The Council of Mortgage lenders (CML) have released data showing the characteristics of lending in Northern Ireland in the second quarter of 2015. CML have confirmed that house purchase activity increased in the second quarter of this year, in both the number of loans and the amount borrowed, although there was a decline in activity compared to the second quarter of 2014. First time buyers and home movers both saw increased activity with First time buyers accounting for 57% of house purchase activity.

Remortgage activity however increased compared to the first quarter this year and is up by a third compared to last year by the amount borrowed. CML have commented that “remortgage lending has shown growth for the third quarter in a row… and is now at its highest since mid 2011 in Northern Ireland”. The reason for this growth could well be the threat of rising interest rates and borrowers seeking to secure a competitive rate before any increase.

If you are thinking of remortgaging, you should carefully consider the following:

  1. What type of mortgage do you currently have?
  2. Are there any fees or early redemption penalties that will be charged by your current lender if you move your mortgage?

It is best to speak to your current lender before deciding on moving your mortgage as they may be able to offer you a better deal to retain you as a customer. This should also avoid the fees involved in a remortgage.

If you do decide to move your mortgage to another lender, it is important to ask for a redemption figure from your current lender that includes all relevant costs and fees that will be charged on repayment of the loan.

Make sure that the increased borrowing (if applicable) is affordable and that you are fully aware of the implications involved should you miss any repayments. Always allow some room for changes to your financial circumstances. You should discuss this in detail with your mortgage advisor before committing to any loan.

It is also important that you contact your legal representative who will be carrying out the legal work involved in your remortgage early in the transaction to ensure that the process runs as smoothly as possible.

The legal steps in a remortgage transaction are briefly outlined below:

  1. Your legal representative will obtain your title deeds from your existing lender.
  2. Once your remortgage application has been approved by your new lender, a copy of your mortgage offer will be issued to you as the borrower and also to your legal representative.
  3. Legal representative will carry out the necessary searches against the property required for the benefit of your new lender.
  4. Once a drawdown / completion date has been agreed, your legal representative will request an up to date redemption figure from your existing lender.
  5. Upon completion, your legal representative will repay your existing lender and request a vacate of the existing mortgage which will then be registered at Registry of Deeds / Land Registry of Northern Ireland.
  6. Following repayment of the existing mortgage and discharge of any associated costs, the surplus monies (if applicable) will be transferred to you by your legal representative.
  7. Your legal representative will deal with the registration of the new mortgage at Registry of Deeds / land Registry of Northern Ireland, following which your title deeds will be forwarded to your new lender.

For further advice on remortgaging your home, please speak to a member of our Property team who will be happy to provide you with assistance.

Please note; the content of this article is for information purposes only and further advice should be sought from a professional legal advisor before any action is taken.