Why such variation in "legal fees"?

geekboy

Hi everyone.

I've been searching and costing-up mortgages - I'm a first-time buyer. I've found the breakdown of details provided by Charcol Online most helpful. But I've seen huge variation in the "legal fees" from one mortgage to another - sometimes as low as £150, sometimes as high as £400. These fees are described as:

Estimated legal fee payable (excluding VAT, disbursements and stamp duty) to your conveyancer before the loan starts. The figure quoted here is an estimate - the total fee for conveyancing may be higher. (fee payable on completion, non-refundable)

Now I've already budgeted several hundred quid for conveyancing fees, and I thought it would be reasonable for the costs of mortgage paperwork to be included in that. So:

Am I right in thinking that this fee will be additional to my existing conveyancing budget?

And how come this fee is apparently determined by the mortgage provider, yet paid to the solicitor? Is there a kind of application fee that the solicitor has to pay to do the paperwork, suggesting it's another mechanism for lenders to claw back money from an otherwise low-cost product?

Thanks once again, for your advice!

cheers,
geekboy

homer_j_3

I am presuming you are seeing these costs on key feature illustrations in the charges section?

For buying a property the cost of the of the purchase will have bearing on the cost of your solicitors costs. I would say that I have seen fees from £500-£1500 for solicitors including searches and dispersments and VAT. Stampduty would be in addition to this.

If you are reading these figures in the illustration of a product then this is the estimated amount of cost that your solicitor will be asked to do on behalf of the lender. The lender will ask your solicitor to do a few different things as part of the purchase process as it is more cost effective than hiring their own and passing the cost to you.

This cost is not an additional cost BUT forms part of the quote you will be given from a solicitor.

Having just re read yor question - the 150-400 is the cost of time for your conveyancer.

HTH

geekboy

homer_j wrote: »

If you are reading these figures in the illustration of a product then this is the estimated amount of cost that your solicitor will be asked to do on behalf of the lender.

Which explains why some bargain mortgages have a higher fee than others, because they're more picky about who they'll lend to, so presumably require the solicitor to do more checks.

Makes perfect sense. Thank you very much for the explanation.

geekboy.

homer_j_3

just to clarify you will only be charged the fee that you have agreed with your solicitor (providing no extra work comes up from searches or has to write more letters due to complexities with the purchase etc).

you do not need to worry about the sols fees on the key features document as they are estimates by the lender and they all do vary - it has nothing to do with associated fees.

When getting quotes from solicitors, ask for full quotes with breakdowns - do not accept £x + dispersements + vat.

Sorry if I have not been clear in my first reply

Rick62

Unless the lender is offering either free legals or reduced fixed fee legals (common on remortgages but never seen on purchases) then you can really ignore their estimate of costs (they all include different parts of the legal costs). The legal cost you will actually pay will be that agreed with your lawyer.

Legal costs vary with the property amount (this affects land registry fees etc) and if leasehold or freehold and if any complications. Usually you will not get much change out of £1,000 on a purchase.