When purchasing a new home with a mortgage, your chosen lender will also need to instruct a solicitor to act on their behalf. The majority of the time, your solicitor will act on your behalf and the lender’s behalf simultaneously. However your lender may not wish to use the same firm as you, which could force you to change your usual solicitor.
Mortgage lenders require a solicitor to act on their behalf to ensure that the property they are securing funds on is a good security for their loan. The solicitor acting on behalf of the lender will check factors such as:
- The value of the property;
- The title of the property; and
- Whether the property has the required Building Regulations and Planning Permission.
These investigations mimic those which a solicitor will make on behalf of the buyer of the property, and so it makes sense for the solicitor to act on the behalf of the lender and buyer at the same time.
As a buyer, your chosen solicitor may need to be on the ‘panel’ for the lender that you are securing a mortgage with for your solicitor to be able to act on the lender’s behalf.
If the solicitor is not on the panel, you may need to pay additional legal fees to another solicitor who will act solely for the lender; this will result in doubling of fees and duplication of paperwork.
Alternatively you will have to personally instruct a different solicitor who is on the panel for that lender so that they may act for both you and the lender in the transaction.
In recent years many lenders have drastically increased the requirements firms must meet in order to qualify onto their panel. This can include information about the number of sales the firm undertakes in a year, required membership to third party bodies and intricate details about the solicitor’s internal processes.
Smaller firms are often most at risk in not making the cut onto a panel as lenders often look for a large turnover of transactions within well experienced firms.
It is essential to check this factor before instructing your solicitor. The buyer’s chosen firm can apply to become part of the panel for a particular panel, however this does require a vast amount of administrative work and they may still be rejected.
Nockolds Solicitors currently sits on the panel for a majority of major lenders. Please do not hesitate to call us on 01279 755777 to enquire further about your particular lender.