Mortgage Brokers Give a Resounding ‘no’
If you’ve ever searched for a remortgage deal you’ve probably noticed that many mortgage lenders offer free legals – that is, they will cover the costs of legal fees for the conveyancing on your remortgage.
And that sounds like a great idea, doesn’t it? After all, lawyers are expensive and anything you can save on legal fees must be a good thing. But a recent survey of mortgage brokers suggests otherwise.
A poll of brokers on the Mortgage Solutions website found that 75.4% thought the service from free legal providers was poor while a further 13% thought it was just average. Only 11.6% thought the service was good. This ties in with reports of general dissatisfaction amongst mortgage brokers over the last few months.
Why is the Service on Free Legals so Poor?
Since the lender chooses which firm to use for conveyancing, the client has no control over who handles their transaction. Lenders frequently use only a small number of firms so if there’s a sudden boom in demand, service levels will suffer. Feedback suggests that while straightforward cases are better handled, the legal providers often have little experience with more complex cases and struggle to offer an adequate service.
Is There a Better Option?
Some lenders are now offering cashback instead of free legals. With cashback, you receive a fixed amount to go towards your legal fees. The advantage of this is that you have control of which firm does your conveyancing and you are in direct contact with the conveyancer.
Steven Sutherland of PM Property Lawyers, comments: “It’s clear that the Mortgage Solutions poll shows a correlation between free legals and compromised customer service. Getting the right conveyancer to process the legal work in your remortgage is crucial. So, by using the cashback option the power is with you, the customer, to choose the conveyancer you want. Here at PM Property Lawyers, customer service is key. We ensure that your dedicated conveyancer has the time, support and resources to make sure a Customer is a priority.”
Nationwide, the UK’s second biggest mortgage lender, withdrew free legals last summer and replaced them with a higher cashback rate. However, they have now reinstated free legals alongside the cashback option so clients can choose either one.
Harvey Harding, MD of PM Property lawyers, adds: “We do a lot of remortgages where the client chooses the cashback option as opposed to free legals. We work within this cashback amount, ensuring the client gets much a better customer service and choice of lawyer.”
If you’re thinking of remortgaging, contact us for chat on 0114 249 6926 to find out what we can do for you and for a no obligation quote.