The fully online payment system also cuts the risk of fraud by eliminating the need for back and forth emails related to mortgage payments.
One of the most stressful and uncertain stages of buying a house may soon be a thing of the past thanks to a new digital mortgage payment platform which launched with the UK’s first mortgage completed online.
Usually, a mortgage lender transfers the balance of the mortgage to the buyer’s solicitor with the buyer also sending their deposit across before the solicitor completes all final checks and then sends the money to the seller’s solicitor.
With Shieldpay, the new digital escrow facility, all funds from the buyer’s side are transferred to the platform directly, without the need for conveyancers to hold large sums of money. When the buyer’s solicitor is satisfied that all the paperwork is in order, they digitally authorise the payment and mortgage and deposit are passed directly to the seller’s conveyancer.
“What would normally take a long time is now a streamlined, safer and more cost-effective transaction,” says Peter Janes, CEO and founder of Shieldpay.
“A lot of time is wasted with back and forth between conveyancers speaking to banks and clients. With Shieldpay anyone can log in and see at any time where the funds are.”
Janes says that this removes a lot of worry at all points in a buying chain because anyone can log into the system and see what’s been paid and what steps they or their solicitor or buyer need to take.
“Every link of a chain that uses Shieldpay will bring forward the time at which the top of the chain can collect their keys and, in a chain where all parties were using this type of solution, it would be possible for a whole chain to complete and collect keys early in the morning, reducing stress and inefficiency for all of the individuals and businesses involved,” said Rob Gurney, head of legal practice and Premier Property Lawyers.
The fully online payment system also cuts the risk of fraud by eliminating the need for back and forth emails related to mortgage payments, meaning phishing scams should increasingly become a thing of the past.
And it should cut expenses for buyers and sellers, who will no longer have to pay for large amounts of a solicitor’s time chasing the progress of a payment, as well as for solicitors who will no longer need to be liable for the huge sums of money involved in a property purchase.
In future, the app should even be able to automatically work out how much tax to pay HMRC and what estate agent fees are due and pay those directly at the same time, although Janes stresses that this is the next step.
At the moment only Barclays and Premier Property Lawyers are using the platform but Shieldpay is in talks with two of the other biggest mortgage lenders to roll it out more widely and create a fully digital network between solicitors and lenders.
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