More and more people are now looking at a remortgage or refinance at the end of their current mortgage product in order to take advantage of the current low-interest rate environment.
Because of this, many lenders have sought to become even more competitive by offering a free legal package, saving on the normal conveyancing fees that are usually paid.
Yes, a remortgage does involve a solicitor as the property is being transferred from one lender to another, hence the new lender needs to know they have no issues with their charge on the property. They need to make sure that the previous lender is paid back, that the right amount is asked for and they will need to do their own checks on the title of the property and their own charge has to be registered by the Land Registry.
However, as free-legals have become more popular, there has also been a growth in the number of issues, problems and complaints as delays have become commonplace where free-legals are used.
With this in mind, let’s look at the differences.
The real problem is that lenders have cut the fees they pay to legal providers to as little as £20 per case, so you can imagine that this only works as a business model if they work on a massive scale. In such a factory environment, customers are mere numbers, staff are not experienced solicitors and attention to detail suffers. Delays are also commonplace and difficult to clear.
The main issue is that it becomes very difficult to push something through that is urgent and we often have our hard-working Case Managers hanging on the phone for an hour or more only to be told nothing or worse, hung up on!
Unfortunately, we have very little control over this part of the process and whilst we will always do our very best to deal with any issues that arise as quickly and effectively as possible, we cannot be held responsible for issues caused by the free legal providers.
This process is fine for simple remortgages where there is a lot of time to spare, but if there is anything more complex, such as duel mortgage/ sole proprietor, changing the names on the deeds or a quick transaction required, our advice is to steer well clear.
More than a few clients have missed their deadline date because of this process and have had to pay at least one month at a higher variable rate.
You often get what you pay for and if you pay nothing…?
More lenders are now offering the option of a cash-back towards legal fees on a remortgage rather than the free-legal route. This is usually from £250 to £500 and whilst that may not cover the full legal fee in some cases it goes a long way towards it.
This enables you to instruct your own trusted Conveyancer, (or we can recommend a few to you), safe in the knowledge that you will be dealt with as a person and we will have good lines of communication with them.
Where speed and/or anything slightly complex is concerned it is always best to instruct your own solicitor or use one from our trusted panel.
Your own solicitor will move much quicker, speak to you and us, as well as help with any associated requirements, such as changing the ownership of the property, extending a lease or helping with a Will.
A good solicitor on your side is just as valuable as a good mortgage broker and in those instances, the vast majority of remortgage deals move smoothly and quickly without a missed deadline in sight.