Mortgage redemption is an important process for homeowners who have completed their mortgage agreement and must pay off the outstanding balance. It can be a highly satisfying moment when it's time to pay off your mortgage and move towards living mortgage-free. However, in most cases, it merely signifies the end of one mortgage term and the beginning of a new one, if you choose to remortgage.

How to get your mortgage redemption statement

To get started, you'll need to contact your lender and solicitor. Your lender will provide you with a mortgage redemption statement, which outlines the balance of your mortgage and any applicable fees associated with it. If you reside in England and Wales, then your title deeds may be held electronically at Land Registry; your solicitor can help you with the necessary amendments when you pay off your mortgage.

If you decide to pay off your mortgage before the agreed date, then you may be charged a redemption fee. This is different from any Early Repayment Charges (ERC) that may apply if you leave the mortgage deal during a tie-in period. Ultimately, redemption fees depend on the mortgage and can change during its course, it is best to make yourself aware of how much the fee costs, this will be on your mortgage redemption statement.

Mortgage redemption process

There are four main steps you need to take in order to complete the process:

1. You will either contact your lender or they will contact you, if you are remortgaging they will contact you to let you know they have put you onto their standard variable rate or that it is due, in this scenario your redemption statement will show the amount you need to borrow for your next mortgage. If you are paying your remaining balance the statement will show the outstanding amount to pay and will outline any fees payable.
2. To complete the remortgage process, you will need the help of a solicitor to draw up the mortgage deeds, transfer the relevant funds for the property and exchange contracts to change over the legal ownership. If you are paying your remaining balance in full, you may not require a solicitor as the final transaction is between yourself and the mortgage provider.
3. Remortgage - You will need to start the mortgage process again and transfer your remaining balance to a new deal. Your solicitor will request the redemption statement from the mortgage lender direct
4. Your solicitor will deal with the exchange and completion of the transaction for the remortgage and will update land registry if necessary. If you are clearing your remaining balance you will make the final payment.

For more information on remortgaging, visit our page here https://www.ltcmortgages.co.uk/discover-the-benefits-of-remortgaging-in-2023-a-homeowner-s-guide-to-unlocking-financial-freedom

Finally, it is important to note that you cannot complete the redemption process without a solicitor's help. They will be responsible for transferring title deeds either to yourself or another lender, ensuring all paperwork is properly filed and recorded. With their assistance, you'll be able to finalise your mortgage redemption and move one step closer to being free from mortgage debt.

If you are looking to remortgage your property, contact us today on 0151 662 0188 or email [email protected]