The typical Homeowner:-

Remortgages to save money and they do this by locking in a lower interest rate.

Coming to the end of their existing mortgage term and they are on the hunt for a remortgage solution that hopefully will save them money!

What happens next?

They contact their Mortgage Broker who carries out a Mortgage Market Review (MMR).

After a few hours the Broker identifies a great deal from a Mortgage Lender who provides :-

1) Free legals as long as the Homeowner uses the Lenders nominated Solicitor

2) Can pay a lower interest rate and make their own legal arrangements

3) A cash back is on offer when the property completes

Which is the best solution for the Homeowner?

If the Homeowner can complete fast to take advantage of the lower interest rate and get free legals then it sounds perfect!

What will a delay cost to the Homeowner if the legal process takes 8 weeks and not the usual 4?

Will the Homeowner miss an important interest reduction deadline?

Will a delay impact on the Homeowners monthly payments to the Lender?

Will the Homeowner be indirectly paying for the legal service even though it as advertised as free legals. If they did not want free legals then would a lower interest rate be on offer.

How does the Broker react when delays impact on their recommendation?

We have read several articles where Free legals has actually caused an issue for both Broker and Client.

https://www.mortgagestrategy.co.uk/free-legals-delays-spotlight/

The above article suggests that the Broker should be responsible for procuring legal services by advising the Client to use the cashback towards the cost of legals.

In this scenario both Client and Broker can focus on service as both want a fast transaction.

http://www.mortgagesolutions.co.uk/news/2017/07/06/two-words-mortgage-brokers-dread-free-legals-lea-karasavvas/

A quote taken from the above article

However, over the last six months, a phrase that breaks me every time I hear it and surpasses everything

…”Free legals”.

Please no, not free legals!! Don’t put me through that!!

So the bottom line is simple.

If you are remortgaging then focus on your best monthly payments and the lowest interest rate possible.

Then focus on instructing a remortgage Solicitor that can act fast.