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Conveyancing solicitor’s role when a client obtains mortgage on property

Conveyancing solicitors role when a client obtains mortgage on propertyIt has been discussed about the importance of ascertaining that the buyer has sufficient means to finance his purchase. If the buyer intends to arrange for a loan, the buyer’s conveyancing solicitor must help him with all the necessary procedures. The following topics deal with the steps to be followed when the buyer decides to finance his purchase through a lender.

The Client has Already Arranged a Mortgage

When the client has already arranged for the finance through a lender, the buyer’s conveyancing solicitor does not have much of a role to play. In such a case, the solicitor just need to check whether  the amount to be borrowed is enough and that all necessary expenditures have been taken into account.

In such circumstances, the buyer would have already submitted the mortgage application to the lender and is unlikely to seek advice on the different financing options available before him from the conveyancing solicitor. Hence, it is advisable that the property conveyancer should not interfere with the present financing arrangements, unless it is apparent that the buyer has settled for an absolutely unsatisfactory deal.  The conveyancer should then suggest that the buyer reconsider his choice and look for other sources of finance that may come with good terms.

Financial Services and Markets Act 2000

The Financial Services and Markets Act 2000 has made it mandatory for all individuals who advise on investment business to be authorised under the Act. Since a mortgage comes under specified investment for the purposes of the FSMA Act, conveyancing solicitors offering advice to clients should be authorised under the same.

However, general advice regarding the various types of loan options available and the type of loan best suited for the buyer do not come under the purview of the Act. Also, arranging for the execution of a mortgage chosen by a client does not come under the scope of the Act. The FSMA Act would be applicable only if the conveyancing solicitor were to suggest a specific lender’s mortgage.

Most firms ensure compliance of the FMSA by complying with the regulations of the SRA which is appointed as a public body for the purposes of the FMSA. If this is not done, authorisation may have to be sought from the FSA.

Photo courtesy: }{enry

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