What is a Letter of Instruction used for in the mortgage process?

A Letter of Instruction serves a crucial role in the mortgage process by providing specific directives to the lawyer involved in the transaction. This document outlines the necessary steps that the lawyer must take to prepare and register the mortgage. This typically includes instructions concerning the relevant legal documentation, satisfying any conditions prior to closing, and ensuring that all parties are on the same page regarding the execution of the mortgage agreement.

When the mortgage is ready to proceed to closing, the Letter of Instruction directs the lawyer on the practical aspects, such as how to handle the funds during the closing process and what documents need to be registered with the appropriate land registry office. By detailing these instructions, the Letter of Instruction is essential for ensuring that the mortgage process is executed smoothly and legally.

The other options represent tasks or documentation that, while important in the lending and property transaction process, do not specifically pertain to the directive nature of a Letter of Instruction. Documenting borrower income, requesting a credit report, and finalizing the loan amount are critical steps in obtaining approval for a mortgage, but they do not involve the legal instruction of the lawyer as the Letter of Instruction does.