What must a lawyer ensure they have on file prior to exchanging contracts when their client buys with a mortgage?

• A. Evidence of funds from the buyer
• B. Mortgage instructions from the lender
• C. A copy of the seller's energy performance certificate
• D. A list of fixtures and fittings to be included

Answer: (B)

The key idea is that, when a purchase is being financed by a mortgage, the lender must have clear directions from the solicitor before contracts are exchanged. Those instructions authorize the lender to fund the deal and set out how the loan will be advanced, secured, and repaid. They specify the loan amount, the terms, when funds will be drawn at completion, and the creation of the mortgage charge against the property. Without the lender’s instructions on file, there’s no authoritative basis for the funds to be released or for the mortgage to be registered, so the transaction cannot safely proceed to exchange and completion.

Evidence of funds from the buyer is relevant to show the deposit and any shortfall, but it does not replace the lender’s instructions. An energy performance certificate and a list of fixtures and fittings are information that may appear in the transaction, but they do not govern the lender’s funding or the mortgage process.