Have you been asked to sign a mortgage document for someone else’s mortgage? We can assist you!

At Argent Law, we often have clients calling us saying that they want a solicitor’s assistance with witnessing their signature on a mortgage.

Usually, this request will reveal a fundamental misunderstanding about what the client needs to sign in front of a lawyer, and why.

Most commonly, the situation is that the client needs what is known as a solicitor’s certificate. This is a document that lenders will require to be signed by a person who is intending to enter into a third-party mortgage (over real estate), or who is intending to guarantee a loan (again, usually a mortgage over real estate).

Being a third-party mortgagor means that a person provides security (often in the form of real estate) for a loan that will benefit some other person or entity. A very common example is a parent who allows a mortgage to be taken over their home so their adult child can by a property, instead of the home purchased by the adult child being the security for the loan.

Alternatively, guaranteeing a mortgage means a person is making a promise to repay a loan (such as a mortgage) in the event the primary borrower defaults on the loan. Common types of guarantees are personal guarantees given by directors of companies when money is borrowed by the company.

Importantly, what is required by the client contacting Argent Law is not simply that a solicitor will witness their signature, but rather that a solicitor provide them with independent legal advice regarding the security contract they are about to enter into.

Such legal advice includes the lawyer ensuring the client:

  • Reads and understands the security documents;
  • Understands their rights and responsibilities under the security documents including any risk the client will be taking on by entering into the security contract;
  • Understands what options if any, they will have in future for withdrawing from the security contract including if any penalties will apply;
  • When the security contract will end;

If you are considering entering into a third-party mortgage or a mortgage guarantee, our experienced solicitors can assist you by making sure you understand your security contract fully, and by providing you with a solicitor’s certificate.

If you would like to make an appointment for a mortgage review and advice, please call Argent Law on 03 9571 7444 today.

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