Do You Need a Solicitor to Remortgage?

Remortgaging, or refinancing in the United States, involves obtaining a new mortgage to replace an existing one. This financial decision can enable homeowners to secure a lower interest rate, change the loan term, or access home equity. While the term “solicitor” is commonly used in other countries, in the US, the equivalent role is performed by an attorney or legal professional. Whether an attorney’s involvement is necessary for a remortgage depends on the specific circumstances of the transaction.

Understanding Remortgaging and Legal Involvement

A remortgage, or refinance, fundamentally involves paying off an old mortgage with a new one, often from a different lender. This process creates a new lien on the property, replacing the previous one. Conversely, a “product transfer” or “rate switch” is an administrative change to an existing mortgage with the same lender, where the terms, such as the interest rate, are adjusted without creating a new loan or transferring the mortgage charge.

Remortgaging involves a legal process to discharge the old mortgage and register the new one. This ensures the new lender’s lien is properly recorded and has priority. Property transactions in the United States commonly involve legal oversight due to the complexities of property law and the need to protect all parties involved. This legal involvement helps to ensure that the property’s title is clear and that all financial and regulatory requirements are met.

When an Attorney is Essential for Remortgaging

An attorney’s role is essential in a remortgage because it involves creating a new mortgage lien and ensuring clear title to the property. This process requires several legal tasks. A closing attorney or title company, often working with attorneys, conducts a thorough title search to verify property ownership and identify any existing liens or encumbrances, such as unpaid taxes, judgments, or other mortgages.

The legal professional performs several key tasks:

• Reviews the new mortgage offer and all associated loan documents to ensure their legal soundness and compliance with federal regulations like the Real Estate Settlement Procedures Act (RESPA) and the Truth in Lending Act (TILA).
• Prepares and oversees the execution of closing documents, including the new mortgage or deed of trust and the promissory note.
• Handles the payoff and discharge of the old mortgage, ensuring it is properly removed from the public record.
• Arranges for the registration of the new mortgage with the county recorder’s office, which legally establishes the new lender’s security interest.

Attorney fees for these services can range from $500 to $1,500 for residential transactions, though they can be higher depending on complexity and location.

Situations Not Requiring an Attorney

There are scenarios where an attorney is not required for changes to your mortgage. The most common situation is a “product transfer” or “rate switch” with your existing lender. In this case, you are not obtaining a new mortgage, but rather changing the terms, such as the interest rate or loan duration, of your current mortgage agreement.

Since a product transfer does not involve a change of lender or the creation of a new lien on the property, extensive legal work like new title searches or recording new deeds is generally unnecessary. The existing lender handles these administrative adjustments internally. This streamlined process typically involves less paperwork and can be completed more quickly than a full remortgage.