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    • set
    • By set 19th Jun 17, 8:58 PM
    • 216Posts
    • 40Thanks
    set
    5% Deposit but Draft Contract says 10%
    • #1
    • 19th Jun 17, 8:58 PM
    5% Deposit but Draft Contract says 10% 19th Jun 17 at 8:58 PM
    Hi

    We received draft contact couple of days ago. On reading through things (for about the 3rd time) under DEPOSITS it's says that 10% will be required. We only have 5% as it's 95% mortgage. I have email solicitor but sat here worrying about it so came here for advice. EDIT: we are in rented and no home to sell.

    Can you help with these questions please?

    Will 5% be OK or does it have to be 10%?

    We could get to 10% but this money has been saved for some furniture, moving costs etc. So if we did have to pay 10% would we still get the 95% mortgage, if so that would mean only 90% of mortgage needed would our solicitor give us the 5% back?

    I hope that makes sense

    Thanks
    Last edited by set; 19-06-2017 at 9:07 PM.
Page 1
    • G_M
    • By G_M 19th Jun 17, 10:25 PM
    • 40,202 Posts
    • 45,968 Thanks
    G_M
    • #2
    • 19th Jun 17, 10:25 PM
    • #2
    • 19th Jun 17, 10:25 PM
    The deposit you pay on Exchange of Contracts is normally 10%.

    Note that this is NOT the same as the money you are putting towards the purchase (ie the purchase price less mortgage) which is confusingly and misleadingly also often called a 'deposit'.

    Even if you were getting a 50% mortgage (and putting in 50% yourself - stupidly called a 50% 'deposit'), you would still only pay 10% on Exchange of Contracts.

    The remaining 90% is paid on Completion.

    In your case there are 2 options:

    1) negotiate a reduced deposit (of 5%). Your solicitor will ask the other side. The seller might agree, or might not.

    2) Use your furniture money, removals costs etc, or borrow the extra cash for a week or 2, and pay 10% at Exchange.

    A week or 2 later, at Completion, you'll receive your (95%) mortgage funds, of which 90% will go to the seller as the outstanding balance and the remaining 5% will come to you (to pay for furniture, removals,loan etc).
    • set
    • By set 19th Jun 17, 10:34 PM
    • 216 Posts
    • 40 Thanks
    set
    • #3
    • 19th Jun 17, 10:34 PM
    • #3
    • 19th Jun 17, 10:34 PM
    Thank you very much G_M I really appreciate that. Will ask for reduced deposit, hopefully seller will agree, if not we can pay the 10% and put the 5% towards furniture when mortgage released. We weren't going to buy furniture until we'd moved in anyway so that's not a problem

    I really appreciate your reply, won't won't stay awake thinking about it now

    Thank you
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