English contractor mortgage holders who plan on moving to Scotland need to be aware that the legal processes between the two countries are very different.
Scotland accounts for slightly under 10% of the entire UK mortgage market but the process of buying and selling a house north of the border is completely different.
The main difference is that a solicitor makes the offer on a buyer’s behalf in Scotland and as soon as the seller accepts the offer, it is legally binding. In England and Wales, the legal binding does not take place until the process is nearly completed.
The Scottish way of doing things means that people moving home have earlier reassurance, and it puts a stop to gazumping and gazundering.
UK mortgage lending companies also need to have different processes in place if they intend to grant mortgages in Scotland. They need separate security and loan documentation for Scottish transactions and the process for repossession in Scotland is also different to the rest of the UK.
The UK Supreme Court made a ruling last November that lenders have to serve a ‘calling up’ notice on a mortgage defaulter and wait for at least two months before taking court action to repossess a property. During repossession proceedings, a Scottish lender must demonstrate that they have complied with certain pre-action requirements similar to but not identical to the pre-action protocol in the rest of the UK.
Bearing in mind the differences between the two sets of processes, mortgage hunters will probably not be surprised to learn that lending is confined to a small number of expert lenders.
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