Do you need your own solicitor for a private mortgage?

Business owners who move fast tend to ask whether they really need a lawyer for a private mortgage, especially when the deadline is close and the lender already has one. The short answer is yes, and it isn’t a formality. A private mortgage is registered against your title, often comes with personal guarantees, and settles through an electronic system that only practitioners can use. Your own solicitor is how you take part safely.

The good news is that the right solicitor, briefed early, makes a private mortgage faster rather than slower. This guide explains what they do, how they differ from the lender’s lawyer, and how to brief them so they’re ready when the documents land.

Why can’t the lender’s solicitor act for you?

Because they act for the lender. Their job is to prepare documents that protect the lender’s position and to make sure the loan is properly secured. They can’t advise you on whether those documents are in your interest, and they won’t point out terms you might want to question.

Your solicitor’s job is the opposite: to look at the same documents from your side. In practice that means:

Lender’s solicitor	Your solicitor
Prepares the loan agreement, mortgage and guarantees	Reviews them and explains what you’re agreeing to
Checks the lender’s security will be properly registered	Checks the terms are what you were offered
Confirms conditions are met before funds are released	Confirms your instructions on where funds should go
Acts in the settlement for the lender	Acts in the settlement for you

With business loans, this matters more than on a home loan. The National Credit Code, which gives consumers specific protections, generally doesn’t apply to credit for business purposes, so the contract itself carries most of the weight. Small businesses do have protection from unfair terms in standard form contracts, which ASIC explains covers businesses with fewer than 100 employees or turnover under $10 million. Your solicitor is the person who spots anything worth raising before you sign, rather than after.

What does your solicitor actually do on a private mortgage?

Their work runs from the offer to the discharge:

1. Reviews the Letter of Offer and explains the costs, conditions, term and what happens on extension or default. Our guide to the Letter of Offer covers what to look for.
2. Explains the loan documents: the loan agreement, the mortgage and any guarantee.
3. Verifies your identity, and that of every signer, for electronic lodgement.
4. Witnesses or arranges signing. Mortgages need to be properly executed; in WA, for instance, Landgate’s guidance notes the mortgagor signs before an adult witness on a paper mortgage.
5. Acts for you in the electronic settlement, confirming the figures and where the money goes, including direct payments to the ATO, a vendor or a supplier.
6. Handles the discharge later, when the loan is repaid, so the mortgage comes off your title.

Paper has almost disappeared from this process. NSW, for example, abolished certificates of title on 11 October 2021, and since then only electronic dealings lodged through an approved network have been accepted. That’s why you need a practitioner who is set up to act in electronic settlements.

Why are identity checks part of the solicitor’s job?

Because the electronic conveyancing system depends on them. The national rules for electronic lodgement require practitioners to verify the identity of the people they act for, and ARNECC’s guidance notes that evidence of those checks must be kept for at least seven years from lodgement.

For you, this means:

• every owner, director and guarantor will need current photo ID;
• the check is done by your solicitor or conveyancer, not skipped because the loan is urgent;
• someone overseas or interstate needs a plan for how they’ll be verified.

Book identity checks for everyone on the first day. It’s the step most often left too late. Once you know who needs to sign, the 60-second loan check is a sensible next step.

Do guarantors and co-owners need their own advice?

Often, yes. When someone other than the borrower is taking on risk, such as a director guaranteeing a company’s loan or a spouse who co-owns the property being offered as security, they’re commonly asked to get independent legal advice. The point is to make sure they understand that their own property or personal assets could be at risk if the loan isn’t repaid.

That can mean a second solicitor, separate from the one acting for the borrowing company. It adds a little cost and time, so plan for it. Our page on third-party security explains when it arises.

How do you choose a solicitor quickly?

If you don’t already have someone, look for a solicitor or firm that:

• regularly acts on commercial or private lending transactions, not only home purchases;
• can act in electronic settlements in the state where the property sits;
• can turn documents around within a day or two, and will tell you honestly if they can’t;
• will give you a fixed quote or clear estimate for reviewing and settling the loan;
• can arrange independent advice for guarantors, or refer them to someone who can.

Your accountant is often a good source of referrals, because they know which firms handle business transactions well.

What should you ask your solicitor about the documents?

A good review is a conversation, not a signature on a certificate. These questions get the most useful answers:

• What’s the total I’ll owe at my planned exit date, including capitalised interest and fees?
• What happens if I’m late repaying? Ask about default interest, extension fees and how much notice the lender must give.
• What exactly am I guaranteeing? A guarantee may cover more than this one loan, so ask about its scope.
• Are there conditions before funds are released? Insurance certificates, bank consents or payout letters can hold up settlement if nobody spots them.
• Can I repay early, and what does it cost? With open terms you should be able to repay at any time with no penalty, but confirm it in writing.
• Is anything unusual for a loan like this? An experienced solicitor will know what’s standard and what isn’t.

Illustrative example: the solicitor who saved two days

A Darwin marine services company needs $180k to pay for an engine rebuild before a contract starts. The director enquires on Monday and, on the same call, gives the name of a local solicitor she has already phoned. The solicitor has blocked out time on Wednesday morning and arranged identity checks for both directors.

Illustrative only. The Letter of Offer arrives Tuesday. On Wednesday morning the solicitor explains the documents, notes one condition about insurance that needs a certificate, and both directors sign. The insurance certificate is sent that afternoon and settlement completes on Thursday, with funds paid directly to the engine supplier.

A second director who called a solicitor only once the documents arrived could easily have lost two days to finding someone with free time.

What should you send your solicitor on day one?

A short email turns your solicitor from a stranger into someone ready to act:

• the property address and who is on the title;
• the borrower entity, and who will sign and guarantee;
• the expected amount, purpose and any deadline;
• the lender’s solicitor’s details, once you have them;
• where the funds need to go at settlement;
• a copy of the Letter of Offer as soon as it’s issued.

Our documents for a private mortgage guide lists what the lender needs from you at the same time, and what happens at settlement shows where your solicitor fits on the day.

Solicitor lined up? See if you qualify

If you already have a solicitor in mind, you’re ahead of most borrowers. Tell us about the property, what is owing, the amount, the purpose and the deadline, and a specialist will set out the next steps so your solicitor knows exactly what’s coming.

The check takes about a minute and involves no credit check, so your credit file isn’t touched just for asking. Your enquiry stays with one direct lender rather than being sent to multiple lenders. A real specialist calls you. Please answer accurately, especially about who owns the property, because that decides who needs legal advice.

Start your private mortgage enquiry →