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  • FIRST POST
    • coffeetea1983
    • By coffeetea1983 3rd Dec 17, 3:33 PM
    • 2Posts
    • 1Thanks
    coffeetea1983
    No Cash for Deposit
    • #1
    • 3rd Dec 17, 3:33 PM
    No Cash for Deposit 3rd Dec 17 at 3:33 PM
    Currently selling my house for £200,000 which has a £33,000 mortgage on it. I can borrow up to £190,000 based on my earnings. Thus a budget of up to £357,000.

    Problem is I am cash poor. Typically a deposit on exchange is 10 % of the Purchase price. I will get £20K on exchange for my place, but assuming I spend up to £357K the deposit on this will be £35.7K. I don't have the additional £15.7K in cash, but can afford the property based on the mortgage. The issue is my assets are in my current house. Has anyone else had this problem? Any tips, will a smaller deposit be accepted? Credit Card loan in the short term??
Page 1
    • Slithery
    • By Slithery 3rd Dec 17, 4:08 PM
    • 358 Posts
    • 516 Thanks
    Slithery
    • #2
    • 3rd Dec 17, 4:08 PM
    • #2
    • 3rd Dec 17, 4:08 PM
    This isn't unusual.

    Your solicitor should negotiate with your vendors that the 20k passed up the chain from your buyers will be acceptable as a deposit. This is usually always accepted.
    • Moriath
    • By Moriath 3rd Dec 17, 4:18 PM
    • 25 Posts
    • 15 Thanks
    Moriath
    • #3
    • 3rd Dec 17, 4:18 PM
    • #3
    • 3rd Dec 17, 4:18 PM
    Thats what happened with my sale just now. Sold for 295. Bought for 350. Didnt have to shell out anything for the deposit. It came from my buyers.
    • juniordoc
    • By juniordoc 3rd Dec 17, 4:53 PM
    • 234 Posts
    • 202 Thanks
    juniordoc
    • #4
    • 3rd Dec 17, 4:53 PM
    • #4
    • 3rd Dec 17, 4:53 PM
    As above, but I'd also advise not buying at the absolute maximum of your budget. Do you *need* to go from a 200K house to a 357k house?
    If you negotiated a 7% exchange deposit on a £320K house for example, you would need 22.4K plus legal fees, stamp duty, survey etc. Remember the higher you go above 250K, the more stamp duty you will have to pay at 5%
    • maninthestreet
    • By maninthestreet 3rd Dec 17, 4:57 PM
    • 15,157 Posts
    • 13,582 Thanks
    maninthestreet
    • #5
    • 3rd Dec 17, 4:57 PM
    • #5
    • 3rd Dec 17, 4:57 PM
    So how are you going to pay the stamp duty??
    "You were only supposed to blow the bl**dy doors off!!"
    • RedFraggle
    • By RedFraggle 3rd Dec 17, 8:46 PM
    • 534 Posts
    • 1,232 Thanks
    RedFraggle
    • #6
    • 3rd Dec 17, 8:46 PM
    • #6
    • 3rd Dec 17, 8:46 PM
    Lenders will not look favourably on loans for that purpose either. We borrowed a bit extra on the mortgage than we needed for the house (move Wednesday, yippee!) because after fees and SD were paid we wouldn't have a level of savings left I'm comfortable with. I wanted to have around 8k left rather than 5k so stuck an extra 3 on the mortgage. That's poor in terms of money saving but it'll make me sleep at night!
    We also needed a few extra grand as a buyer renegotiated after survey so don't forget to build that in and all associated moving costs. I had a spreadsheet.
    Officially in a clique of idiots
    • saajan_12
    • By saajan_12 4th Dec 17, 9:58 AM
    • 989 Posts
    • 669 Thanks
    saajan_12
    • #7
    • 4th Dec 17, 9:58 AM
    • #7
    • 4th Dec 17, 9:58 AM
    Exchange deposit
    It's very common to agree a lower deposit with your vendor, 5.6% here if you just pass up the 20k from your buyers. Only likely to cause issues if your buyer is positing a smaller deposit too, and you end up with a couple of % deposit on your purchase, though this is rarely a problem. If the vendor agrees, the solicitor would write in a clause stating the amount at risk would still be 10% ie 35.7k, which you would top up if you fail to complete.

    £357k budget Don't forget you also need money for
    - stamp duty £7850
    - mortgage application fees (£0-2k)
    - survey / valuation fees (£0-2k)
    - solicitors / searches fees (£1-3k)
    - removals (£1-4k)
    • coffeetea1983
    • By coffeetea1983 6th Dec 17, 9:50 PM
    • 2 Posts
    • 1 Thanks
    coffeetea1983
    • #8
    • 6th Dec 17, 9:50 PM
    • #8
    • 6th Dec 17, 9:50 PM
    Thanks for all the replies, it has reassured me that the deposit will not be an issue, guess I have to explain to my sols early on.

    With regards to fees. sdlt etc, yes I have this all saved up with a contingency too, just not enough for the additional deposit, thus the question
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