Free Remortgage Legal Fees - The Pros and Cons to using the mortgage lender's solicitor
02/03/2019
584
5 min read
Fee free mortgage deals are often offered when remortgaging; either a buy to let or a residential property. After paying the average legal fee of £800 to buy the property (often with a less than average experience), the offer of free legals can seem appealing. However, is there a cost to fee free conveyancing and what if you are doing more than remortgaging like a transfer of equity? The following article examines the pros and cons of using the mortgage lenders solicitor, what you can expect from the experience and an explanation of what costs you have to pay on top of the free legals (which can add up to £100s).
What is included in free legals?
The free legal work includes the basic, standard, legal work for the mortgage lender to register their charge over the legal title. There are quite a few extra costs that we detail for you at the end of the article including bank transfers and ID checks. Standards legal work includes:
- liaising with mortgage lender;
- reviewing mortgage and answering questions required by the mortgage lender. For example, if your property is a buy to let the mortgage lender needs to see sight of your AST if you have a tenant.
- (if leasehold) inform freeholder of the new mortgage
- Draw down mortgage funds fro mortgage lender
- Settle existing mortgage (there is a charge for the bank transfer)
- Register the mortgage lender's charge at the Land Registry (Land Registry fee normally included)
What costs will you have to pay?
Free conveyancing fees only apply to the lawyer's legal fees and not the following additional costs you'll have to pay:
| Disbursement | Costs |
|---|---|
Land Registration The Land Registry fee is payable based on the value of your property (not what you bought it for, what the lender has valued the property at for lending purposes). |
|
Local authority search indemnity Unlike when you purchased, most mortgage lenders allow you to obtain local authority indemnity insurance instead of the actual local authority search. The indemnity insurance is cheaper than the search. |
|
Online Identification (per Person) | £8 |
Official Copy of Register & Title Plan (per title) | £6 |
Official Copy of the Lease (if leasehold) | £3 |
Priority and Bankruptcy Land Registry Searches | £10 |
Notice fee payable to managing agent/freeholder* (only payable if leasehold and cost to be confirmed during process by your freeholder) | £36-£360 |
Which conveyancers offer free legals?
Your mortgage lender chooses a solicitor for you, you cannot choose any solicitor you want. Here are some of the conveyancers who work with mortgage lenders for free legals:
- Enact Conveyancing Limited, a conveyancing practice regulated by the Council for Licensed Conveyancers
- Optima Legal Services Limited, authorised and regulated by the Solicitors Regulation Authority
- Your Conveyancer Limited, a conveyancing practice regulated by the Council for Licensed Conveyancers
What can your solicitor charge extra for?
Free legals always come with an additional fee sheet where the conveyancer can charge extra for additional work on top of the remortgage. Although some are fees which should be included as standard such as bank transfers and ID checks. This list was sourced from the terms of the above 3 law firms however your costs may vary.
| Additional Work | Additional Fee (excluding VAT) |
|---|---|
| Acquiring a further share in a shared ownership property (also known as staircasing) (excluding disbursements) | £195 |
| Admin fee to order documents/leases referred to in office copies (excluding disbursements) | £10 and document cost |
| Applying a declaration of trust | £195 |
| Applying a deed of guarantee | £150 |
| Applying a deed of postponement | £195 |
| Applying a deed of variation | £50 |
| Assignment/reassignment of life policies | £30 per policy |
| Cancelling a cheque | £25 |
| Checking Assured Shorthold Tenancy | £50 |
| Completing electronic identification checks (per customer) | £10 |
| Dealing with a pending repossession | £150 |
| Dealing with an unsecured loan | £25 |
| Dealing with independent solicitors (hourly rate) | £130 |
| Dealing with independent solicitors (to send purchase money only) | £40 |
| Dealing with Islamic finance | £150 |
| Dealing with related freehold purchase (excluding disbursements) | £195 + LR fees, searches, stamp duty land tax |
| Dealing with Stamp Duty Land Tax | £75 |
| Dealing with Transfer of Equity (excluding disbursements) | £245 |
| Drafting a lasting power of attorney | £95 |
| Drafting a matrimonial separation agreement | £50 |
| Drafting a statutory declaration | £50 |
| Drafting an assured shorthold tenancy | £95 |
| Drafting RX3/RX4 forms | £50 |
| Extending or amendment a lease (hourly rate) | £130 |
| First registration at Land Registry (excluding Land Registry fee above £40) | £95 plus any additional Land Registry fee incurred above £80 |
| Forwarding a copy title information document/updated registers of title to borrower) | £20 |
| Forwarding pre-registration deeds and documents | £20 |
| Insufficient postage on documents received from customer | £5 |
| Investigating bankruptcy entries per case (insolvency register check) | £30 |
| Investigating the title to additional land | £45 |
| Landlord or management companies | Variable |
| Matrimonial waiver | £15 |
| New Build or purchase of plots of land | £150 |
| Obtaining a bespoke indemnity insurance policy | £45 plus policy premium |
| Obtaining a letter of postponement from the Ministry of Defence or local authorities | £50 |
| Obtaining a letter of undertaking regarding searches (Scotland) | £30 |
| Obtaining a letter of undertaking regarding title (Scotland) | £30 |
| Other additional work not already listed here | £130 hourly rate |
| Postponing completion at the request of the customer where completion funds have been received | £30 |
| Processing a change of name or address at Land Registry | £20 |
| Rectifying a defective title (hourly rate excluding disbursements) | £130 |
| Registering a third party transfer document | £100 and any additional land registration fees, searches or stamp duty land tax payable |
| Removing a personal charge (per charge) | £150 |
| Removing a tenancy in common restriction | £50 |
| Removing second and subsequent charges (per charge) | £30 |
| Returning an overpayment received from a previous lender | £30 |
| Reversing legal completion (excluding disbursements) | Up to £400 |
| Reviewing a shared ownership lease (excluding disbursements) | £95 |
| Reviewing existing tenancy agreement | £50 |
| Satisfying a special condition in the mortgage offer (per condition) | £45 |
| Satisfying or removing a restriction or caution (or inhibition in Scotland) | £150 |
| Self Build - stage payment mortgage | £50 per tranche |
| Separating title and creating servitude rights/burdens (Scotland) (excluding disbursements) | £195 |
| Settling an IFA's professional fees | Cost of relevant Telegraphic Transfer (TT) |
| Storing title deeds (Scotland) (per annum) | £75 |
| Telegraphic transfer (same day payment) of surplus funds to the borrower (per transfer) | £30 |
| Telegraphic transfer (same day payment) to redeem each existing charge (per transfer) | £30 |
| Upgrading a legal title | £50 |
| Unclear searches | £75 |
| Validating the source of a shortfall over £1,000 | £25 |
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