Legal fees when remortgaging with the same bank?

SouthLondonUser

I have a mortgage with the Chelsea Building Society (part of the Yorskhire Building Society), a 2-year deal that is coming to an end.

If I decide to remortgage with the same lender, would they still need to appoint solicitors – whom I’d end up paying for? The bank already has a lien on my property, so, unless their legal criteria have somehow changed drastically since two years ago, I don’t see why they should. A friend with an HSBC mortgage has remortgaged to another HSBC product and didn’t have to go through solicitors for this reason.

I called, twice, but in both occasions I was told the process and cost of appointing solicitors is the same for new and existing mortgage clients. When I protested: “But you already have a lien on my property” the answer – both times - was: “A lien? What’s a lien?” which makes me think the CBS employees I spoke to didn’t really know what they were talking about!

I sent a question in writing from their site, but they haven’t answered yet.

If keeping the same lender doesn’t mean saving legal fees, then I have a greater incentive in considering another bank.

The thought of going through the legal phase with CBS again kind of scares me, because 2 years ago they were a huge pain: I chose a law firm from their panel thinking that a remortgage would be straightforward, but it took them forever (which caused me to pay 7 weeks of higher interest because my mortgage had reverted to a high SVR), and they forced me to buy an insurance policy against the risk that a now dissolved railway company might have some kind of claim on the land, something Nationwide’s solicitors were not worried about when I first took out my mortgage.

davidmcn

SouthLondonUser wrote: »

When I protested: “But you already have a lien on my property” the answer – both times - was: “A lien? What’s a lien?” which makes me think the CBS employees I spoke to didn’t really know what they were talking about!

Unless something very odd is going on, they don't have a lien on your property, so I'm not surprised that they're confused about what you're talking about! Do you mean a charge?

kingstreet

You are taking a customer retention product, not a remortgage.

A remortgage involves a change of lender and a new mortgage deed is required, hence the 'remortgage' bit.

There should be no legal work needed, unless you are also undertaking a transfer of equity where a party leaves or joins the title/mortgage.

If you are asking your existing lender about a remortgage, they are probably giving you the right answer for someone remortgaging to them from elsewhere.

SouthLondonUser

@davidmcn , forgive my ignorance, but what's the difference?
I had always thought that mortgages were a type of lien.
Or are there differences between the US and England?
I remember reports by the Bank of England mentioning "first-lien mortgage loans" (in the UK).

@kingstreet , some banks call it a "remortgage" even if you stay with them. Anyway, regardless of semantics, I had made it very clear that I am an existing customer and that I am considering getting another mortgage product with them (without any equity release nor any other kind of additional borrowing), so I don't understand their answer.

SouthLondonUser

I have called CBS a third time. This time the employee said that existing customers do not have to pay legal fees, BUT products without ERC are available to new customers only, NOT to existing customers!

davidmcn

SouthLondonUser wrote: »

@davidmcn , forgive my ignorance, but what's the difference?
I had always thought that mortgages were a type of lien.
Or are there differences between the US and England?
I remember reports by the Bank of England mentioning "first-lien mortgage loans" (in the UK).

Nope, that seems to be purely American jargon. I've never heard anybody here refer to mortgages as "liens".

kingstreet

SouthLondonUser wrote: »

products without ERC are available to new customers only, NOT to existing customers!

That's often the issue with the word 'remortgage.'

People look at their existing lender's remortgage products when they are available to new borrowers only; when customer retention products, which are often not as good, are available only to existing borrowers.

I've mentioned this many times to help people avoid misunderstanding the products open to them but occasionally get accused of using semantics.

Farmerbob

Are you looking for a product without an ERC? I take it you are referring to an Early Repayment Charge? I can't see them offering even products to new customers without an ERC unless I'm missing something

kingstreet

Here's just a few of my posts about the dangers of use of 'remortgage;-'

http://forums.moneysavingexpert.com/showpost.php?p=70920667&postcount=4

http://forums.moneysavingexpert.com/showpost.php?p=70876331&postcount=4

http://forums.moneysavingexpert.com/showpost.php?p=67757324&postcount=3

http://forums.moneysavingexpert.com/showpost.php?p=65209628&postcount=3

http://forums.moneysavingexpert.com/showpost.php?p=57619657&postcount=2

http://forums.moneysavingexpert.com/showpost.php?p=48561205&postcount=4

Six years worth of explaining the difference so members don't look at the wrong options.

Has it really been that long...?

SouthLondonUser

@Farmerbob:
Chelsea Building Society, product code 3368
http://www.thechelsea.co.uk/mortgages/product.html?id=33968
65% LTV, 2-year tracker, no early repayment charges.
Correct as of today, 27-Jun-2017

@Kingstreet: I understand your point. My gripe is most certainly not with you, but with the 2 CBS employees, to whom I had told very clearly that I am an existing customer. They should have clarified immediately that existing customers do not need to pay legal fees, since the lender already has security over the property (however you want to call it: lien, charge, or whatever), and they should have made it clear that certain products are available to new customers only, not to existing customers.

By the way, the CBS does offer me a 1.15% 2-year tracker, but WITH ERC. I understand banks often make certain products available to new customers only, but in this case the rate is the same, it's only the ERC that change.

Farmerbob

Cheers, who'd have thought. I guess as it stands it's the same product except one has an ERC and one does not. Question is is that being the case any chance you will move over the next 2 years that means you'll have to pay an ERC and do you intend on making any overpayments over the time as well?