Remortgaging: The Nitty-Gritty (Simplified)

Remortgaging is a great way to save money or release cash, but there are still some strict legal steps involved. At Mojo, we like to keep things transparent so you know exactly what’s happening with your money.

Here is the lowdown on the legal and financial logistics.

1. How much should I apply to borrow?

Getting this figure right at the start saves a lot of admin headaches later on.

• The Estimate: If you’re applying early (e.g., to lock in a rate months before your current deal ends), your mortgage balance will naturally go down between now and your switch date. Your Mojo Expert will help you estimate exactly what that balance will be on completion day.

• The Re-Check: While our estimates are usually spot on, it’s always a smart move to double-check your actual balance closer to the time.

• Why it matters: If the amount applied for is wildly different from what you actually owe, you could end up with a Shortfall (owing cash) or a Surplus (borrowing too much).

2. Borrowing more than you currently owe?

If you are releasing equity (borrowing more than your current mortgage balance) for home improvements or debt consolidation, the process is straightforward.

• The Transfer: Your new lender sends the full loan amount to your solicitor.

• The Split: Your solicitor uses the funds to pay off your old lender first.

• The Payout: Once the old debt and any necessary fees are cleared, the solicitor transfers the remaining "extra" cash directly to your nominated bank account. This usually happens on the day of completion or the next working day.

3. What do the solicitors actually do?

It surprises some people that you need a solicitor  just to swap lenders, but because the loan is secured against your home, the legal checks have to be watertight. Your solicitor or conveyancer will handle:

• ID Checks: Verifying who you are and where your funds are coming from.

• Title Checks: Making sure the Land Registry records are correct and you legally own the property.

• The Money Swap: Requesting the cash from your new lender and using it to pay off your old lender.

4. A heads-up on "Free Legals"

If your new deal comes with "Free" or "Fees Assisted" legal work, that’s a great perk—but there are limitations.

• What’s covered: This usually covers a standard, straightforward transfer.

• What’s NOT covered: If your home is a bit more unique, there might be extra charges. Common examples include:

  • Leasehold properties: These require extra checks with the freeholder.

  • Multiple titles: For example, if you bought a separate strip of garden land later on.

  • Transfer of Equity: If you are adding or removing a partner from the deeds.

• Our Quote: If you’re using a solicitor we quoted for you, the same rule applies. The quote covers the standard stuff, but if complex legal bits pop up, your solicitor will let you know if there’s an extra cost involved.

5. Who gets the Cashback?

If your mortgage deal comes with a cashback incentive (e.g., £250 or £500), you might be wondering when that lands in your pocket.

• Where it goes: In most cases, the lender sends the cashback to your solicitor, not directly to you.

• How you get it: The solicitor will usually add this to the "pot" of money they receive. They will either use it to pay any fees you owe, or, if everything is paid for, they will transfer it to your bank account along with any other surplus funds upon completion.

• Note: Very occasionally, a lender might pay this directly to your bank account a few weeks after completion, but the solicitor route is the industry standard.

6. How do I make sure the old lender gets paid the right amount?

Remember back in Step 1 when we estimated your borrowing amount? This is the "moment of truth" where we verify if that estimate matches reality.

This process relies on a document called a Redemption Statement.

• The Solicitor’s Job: Once a completion date is set, your solicitor asks your old lender for a Redemption Statement. This calculates your exact balance, interest, and any exit fees up to that specific day.

• Your Job (The Double-Check): You can check your redemption figure directly with your lender up to 30 days before you complete.

• Spot the Difference: Compare the figure your lender gives you with the figure on your solicitor’s completion statement and your Mojo mortgage offer.

  • Action Required: If the numbers don't match the amount we estimated at the start (e.g., you owe £150k but the new offer is only £148k), let us know immediately.

  • The Fix: We might need to get a revised offer from your new lender to cover the gap. Catching this early stops last-minute panic!

7. What happens to my last payment with my old lender?

This depends on how your completion date lines up with your Direct Debit date.

• If you switch  before your normal payment date - Great! Ideally, the mortgage is paid off before the money leaves your account. However, don't cancel your Direct Debit until your solicitor confirms the deal is done. If there's a delay and you've cancelled, you risk a "missed payment" mark on your credit file.

• If you switch on or close to your payment date: The old lender will likely take your normal payment. Don’t worry. Your solicitor will have paid off the mortgage assuming that payment wasn't made.

  • The Result: You’ve effectively overpaid. Your old lender will refund this to you, usually within 10–14 days.

8. How does the first payment with the new lender work?

Your new lender will write to you to confirm your new payment date.

Why is the first payment often higher?  Don't be alarmed if the first bill looks big. Mortgage interest is paid in arrears (for the month just gone), but you usually pay for the month ahead.

• Example: You complete on Jan 15th. Your normal payment date is the 1st.

• On Feb 1st, your bill covers:

  1. The standard payment for February.

  2. PLUS: The interest from Jan 15th to Jan 31st. After that, it settles down to the normal amount.

9. What if there is a Shortfall or Surplus?

Ideally, if we got the estimate right in Step 1, the numbers balance perfectly—but small differences happen.

• Shortfall (You owe a bit): If the new mortgage offer is slightly less than the debt + fees, your solicitor will send you a completion statement. You just need to transfer the difference to them before the switch happens.

• Surplus (You are owed a bit): If the new mortgage is for more than you needed (or you made a monthly payment that wasn't factored in), you’re in luck. Once the solicitor pays off the old lender, they’ll transfer the extra cash straight to your bank account.

Top Tip: The sooner we know that there might be a mismatch between the amount you owe and the amount you are borrowing, the better. If you suspect the numbers are drifting apart, let us know immediately so we can help fix it before completion day!

Disclaimer: This FAQ is for information only and isn't financial or legal advice. For specifics, chat to your solicitor or your Mojo Expert.