September 24, 2013 | Posted in:Conveyancing
Compare Remortgage Solicitor Fees
When it is time to remortgage your house you will need to instruct a conveyancing solicitor. The reason why you have to do this is because it is a requirement from the lender that a professional handles the legal work. To get the best deal you should compare remortgage solicitor fees to locate the cheapest price. This will reduce the cost of the legal work and enable a smooth transaction of the mortgage. To be able to compare remortgage solicitors easily you can use the house conveyancing site. All you have to do in order to be able to compare fees is to fill out a few details about your property. Once you have carried this out, our state of the art system will search the market for the best deals. You will not only be able to compare remortgage solicitor fees but also the feedback of each different firm.
What is a conveyancing panel?
When purchasing a property with the aid of a mortgage, it is a good idea to approach lenders to find a suitable mortgage product and secure an offer before choosing which conveyancing solicitor you would like to represent you. This is because all mortgage lenders have a panel of solicitors that they are happy to work with on conveyancing transactions. New financial regulations put in place to reduce fraud have seen many financial establishments reduce their panels substantially, due to being required to take greater control. This means there is now more chance than ever of instructing a solicitor, only to find that they are not included on your mortgage lender’s panel. Once you know which lender will provide your mortgage, you will be able to ask for a list of their panel solicitors and choose a firm to represent you, so it may be wise to hold off on instructing a solicitor until you have a mortgage offer agreed. However, this can cause delays to the purchase process, as no legal work can be carried out until a solicitor has been instructed. This can be a Catch-22, as mortgage offers have limited life spans, so complex transactions that are not started until the mortgage offer is agreed may not complete before the mortgage offer expires.
Can I choose to instruct a solicitor that is not on the panel?
It is possible to choose remortgage solicitors to represent you in a purchase even if they are not part of the mortgage lender’s panel. In this case the mortgage lender will choose another solicitor to represent them in dealing with the mortgage offer, and this solicitor will work alongside your own who will carry out all other legal work relating to the purchase. This means that if you instruct a solicitor to start work on your conveyance before securing a mortgage offer, then find out that the lender’s panel does not include your solicitor, the conveyance can still go ahead. The mortgage lender will simply instruct a different solicitor to represent them.
How may the purchase be affected if I instruct two solicitors?
The problem with having two solicitors working on the case, one for the mortgage lender and one for the borrower, is that it usually leads to extra costs and sometimes also to delays. Having an extra party involved in the transaction (i.e. the lender’s solicitor) can slow the whole process down, as it means documents have to be sent back and forth between the two remortgage solicitors. If significant delays result, this could lead to a breakdown in the chain that would mean starting from scratch. Furthermore, the lender will generally not pay their solicitors fees. The cost of these fees are passed on to the borrower, meaning they have to cover legal fees of their own solicitor and the solicitor appointed by their lender. This can result in hundreds of pounds being paid out over budget.
Every borrower has to take a toss-up as to whether to obtain the mortgage offer before instructing a solicitor or to instruct a solicitor and hope they are on the lender’s panel. It is a good idea to approach different lenders that you are interested in borrowing from and ask to see a list of their panel solicitors before applying for a mortgage. If you can find a firm of solicitors that appears on most or all of the panels, which you would be happy to instruct, this can solve all problems.
Remortgaging Early Repayment Charge
A mortgage product lasts a set period. During this, you are not allowed to pay more than is stated in the terms and condition or repay the loan. If you do this, then you will be charged an early repayment fee. Make sure you look into the length and costs of this before signing up for the deal.
The reason lenders charge a fee for early repayments is because they are losing money from the interest payments. To pay for this, they add this to the mortgage deal. The amount charged is a percentage of the total amount outstanding. In many cases, it reduces the length of the term.
An example of this is if you were to take out a deal on a five-year tracker. The early repayment fee could be five percent for the first year, four percent for the second, three percent for the third and so on.
If you are looking to overpay or pay off the mortgage during this time, you need to calculate it carefully. When remortgaging you need to take into consideration the cost of this to see if your new deal is worth taking out.
There are two different options you can take when paying this amount. The first is to pay the loan provider you are leaving an upfront fee. The second is to increase the amount that your borrowing on the new mortgage to pay for this cost.
If you are going to increase the size of the loan to pay the fee, you need to be careful. An increase in the loan to value ratio may make your repayments more expensive.
The only way to avoid paying the fee is by remortgaging once you current deal ends. It finishes when the incentive time frame finalizes. For instance, if you have a five year fixed term, the early repayment charges will stop once the five years is up. The conveyance solicitor will make sure that the dates are correct so that you do not have to pay it.
The typical cost of the fee is between 1% – 5% of the outstanding loan balance.
Mortgage Exit Fee
The mortgage exit fee is an administration charge that is payable to the current lender. It is for the title deeds of the property forwarded to the solicitor.
When you first apply for a mortgage, typically the fee can be paid upfront, or you can choose to pay once the deal comes to an end and your leaving. There is zero interest paid on the amount, which makes the option of paying at the end attractive.
Make sure to read the terms and conditions regarding this matter. If you do not have it in writing from the lender, they may be able to charge more. If it were not put in writing when you took out the loan, you should not be charged for it.
The amount that it costs should be in the “Key Facts Illustration from the Lender”. The average cost for this is between £0 – £300.
Remortgage Cost Breakdown
New Lender Mortgage Fees
Mortgage products have one if not two fees attached to them. The typical costs are the arrangement and booking fee. Below we detail them:
The main charge that lenders attach to mortgages is the fee for arranging it. They attributed it to the administration cost that the lender had to undergo to complete the loan. It has since changed, and most banks use it as one of their primary sources of income along with the rate of interest.
Mortgage Booking/Arrangement Fee
There is a fee that lenders charge for arranging the mortgage. It can be called some different names, but most commonly it is known as the booking or arrangement fee.
When deciding which is the best mortgage for you, make sure to delve deep into the fees charged. There is a couple of items you need to inspect adequately. The first thing that you need to be careful about is going for one just because it has the lowest interest rates. Because it has the cheapest rate does not necessarily mean it more inexpensive. A large number of lenders offer low rates but charge a hefty arrangement fee on top. Once you add that to the loan, it can work out a lot more expensive than one with a higher rate. The type of loan, rate offered and fee attached need careful examination.
The lenders offer the choice of paying the fee for arranging the mortgage upfront or add it on top of the mortgage you are taking out. If you do decide to add the cost onto the loan, you will be required to pay interest on it. Paying it at the start could cost you money in the short-term but over the longer term you will be better off.
To secure a great deal such as a discounted, fixed rate or tracker, lenders sometimes charge a booking fee. The cost for this is not too expensive, with prices ranging from £100 – £200.
If there is a booking fee, it need to be paid when you submit the mortgage application. It is a non-refundable product, so if the sale or purchase falls through, you will not get your money back.
Property Valuation Fee
A large number of remortgage deals offer a fee property valuation. If not included in the sale, the costs range from £300 – £400.
The reason it is part of lenders requirements is for their security. If you default on the loan, they will have to repossess the property and try to sell it to get their money back. They need to make sure that the home you’re buying is worth what you say it is.
When remortgaging you will only have to pay for this one survey. Other surveys such as a structural, is not required.
Remortgage Solicitor Fees
You are required to hire a remortgage conveyance to carry out the legal work. The conveyancer will remove and add the new lender to the title deed.
Many packages include the remortgage legal fees in the deal. The downside to this is the conveyance lawyer has to be on the lenders panel. If a conveyancer is not on their panel they can apply, however, this can take a long time to find out if they are accepted or not.
Mortgage Name Change
When you are adding or removing a name from the mortgage, you need to inform your conveyancer about this. Do to there been additional work required to perform this, it will not be part of any free packages. You will need to get a remortgage solicitor quote to find out the costs. Make sure that you tell the person handling your transaction upfront about this. If you do not, it will lead to long delays.
Mortgage Broker Fee
A mortgage broker can save you a lot of money because they can search the whole of the marketplace. The best agents are free of charge or have a tiny fee. Stay away from ones that you a percentage of the loan amount as they are overpriced. All brokers get paid by the lender, so any that charge you are trying to take advantage. There are a lot of free professional advisors in the UK to choose.
Do not hire a mortgage broker that asks you for an upfront fee. If you do not go ahead with the deal, or the lender rejects your application, you could end up losing that money.
Monthly Mortgage Repayments
Working out what your monthly repayments will be if you go for an individual product is vital. You need to be able to make a budget and include all of your monthly outgoings. Make sure that you have enough money to put away each month for savings. Also, remember that when you remortgage your repayments could go up. Do not overstretch yourself when buying a property, as it could end in financial hardship.
Remortgage Solicitor Quotes
Now you understand the costs involved in remortgaging you now need to get your conveyancing quotations. Our site provides the best price remortgage solicitor quotes in the UK. Compare services, legal fees, reviews and pick the mortgage conveyancer that offer you the best deal.