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  • FIRST POST
    • hstephuk
    • By hstephuk 9th Feb 18, 6:01 AM
    • 5Posts
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    hstephuk
    Deposit using equity only
    • #1
    • 9th Feb 18, 6:01 AM
    Deposit using equity only 9th Feb 18 at 6:01 AM
    Hi. I have just sold my house for £80k. Giving me £24500 equity. I am buying a new house for £160k. I have no spare cash so i want to use the equity for the deposit for my new house. I want to use £18k as deposit & the rest £6500 i want to come to myself to pay the solicitors etc & to do whats required on my new house.

    How does it work? Will i need to find the deposit first then on completion i get it back or if we exchange & complete same day the money comes straight from the equity to my new mortgage company & a cheque or bank transfer to me??

    Thanks in advance
Page 1
    • joeistheone
    • By joeistheone 9th Feb 18, 8:17 AM
    • 46 Posts
    • 25 Thanks
    joeistheone
    • #2
    • 9th Feb 18, 8:17 AM
    • #2
    • 9th Feb 18, 8:17 AM
    When you say sold your house, I'm assuming you have an offer accepted to purchase your house and so the sale hasn't completed otherwise you'd have actual cash.

    In which case, to answer to your question, the seller of your property would accept the equity as deposit and/or any actual cash you get from the buyer of your property. Not sure if the position is different if the person buying your property isn't a first time buyer or cash buyer and are also using equity though.
    • PasturesNew
    • By PasturesNew 9th Feb 18, 8:21 AM
    • 61,563 Posts
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    PasturesNew
    • #3
    • 9th Feb 18, 8:21 AM
    • #3
    • 9th Feb 18, 8:21 AM
    You do not need hard cash - if you did then most people would be unable to move house ever.

    The deposit is theoretical and in many cases never exists as "actual money". The deposit is just a promise to pay from exchange onwards. You make a commitment to buy at exchange and your deposit is held by the solicitor - without the actual money being handed over your solicitor (who you need to tell, just so they do know they won't be receiving money from you) will simply ensure the contract is set up so that no actual money is expected by the other side.

    As a "promise to pay" you are liable to pay that amount if for any reason you pull out... which is very messy/expensive in itself, so very rare.

    Just let your solicitor know that all your money is tied up in your house and so you won't be forwarding hard physical cash at exchange.

    All perfectly normal.
    • enthusiasticsaver
    • By enthusiasticsaver 9th Feb 18, 8:37 AM
    • 5,690 Posts
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    enthusiasticsaver
    • #4
    • 9th Feb 18, 8:37 AM
    • #4
    • 9th Feb 18, 8:37 AM
    The only cash you may have to pay up front are solicitors searches and mortgage survey. The actual deposit will not have to be paid at exchange as the solicitor will hold your buyers deposit or promise to pay and there is equity in your property. The solicitors will pay themselves after completion.
    Debt free and mortgage free and early retiree. Living the dream

    I'm a Board Guide on the Debt-Free Wannabe, Mortgages, Banking and Budgeting boards. I volunteer to help get your forum questions answered and keep the forum running smoothly. Any views are mine and not the official line of moneysavingexpert.com. Pease remember, board guides don't read every post. If you spot an illegal or inappropriate post then please report it to forumteam@moneysavingexpert.com
    • hstephuk
    • By hstephuk 9th Feb 18, 9:35 AM
    • 5 Posts
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    hstephuk
    • #5
    • 9th Feb 18, 9:35 AM
    • #5
    • 9th Feb 18, 9:35 AM
    Thanks. I thought that would be the case. I dont want the full amount of equity going over i want £6.5k myself is that ok& would they just put it in my bank or by cheque? Thanks
    • enthusiasticsaver
    • By enthusiasticsaver 9th Feb 18, 11:35 AM
    • 5,690 Posts
    • 11,246 Thanks
    enthusiasticsaver
    • #6
    • 9th Feb 18, 11:35 AM
    • #6
    • 9th Feb 18, 11:35 AM
    If you are not using all the equity and there is a balance due at completion your solicitor will either send you a cheque or do a bacs transfer on day of completion or a day or so later once they have done the completion statement. This will be after they have deducted their costs so you wont get £6500.
    Debt free and mortgage free and early retiree. Living the dream

    I'm a Board Guide on the Debt-Free Wannabe, Mortgages, Banking and Budgeting boards. I volunteer to help get your forum questions answered and keep the forum running smoothly. Any views are mine and not the official line of moneysavingexpert.com. Pease remember, board guides don't read every post. If you spot an illegal or inappropriate post then please report it to forumteam@moneysavingexpert.com
    • Thrugelmir
    • By Thrugelmir 9th Feb 18, 12:44 PM
    • 57,432 Posts
    • 50,719 Thanks
    Thrugelmir
    • #7
    • 9th Feb 18, 12:44 PM
    • #7
    • 9th Feb 18, 12:44 PM
    If a 10% deposit is required on exchange. Then you'll need to find £8k. Your buyer will provide £8k as deposit on your property.

    Your vendor maybe depending on receiving £16k in order to fund the deposit on their potential purchase. Which could be 10% of a much higher value property.
    Financial disasters happen when the last person who can remember what went wrong last time has left the building.
    • hstephuk
    • By hstephuk 19th Feb 18, 5:21 AM
    • 5 Posts
    • 3 Thanks
    hstephuk
    • #8
    • 19th Feb 18, 5:21 AM
    • #8
    • 19th Feb 18, 5:21 AM
    The vendor isnt buying a property. Moving in with her mum for now. My buyers are having a 100% mortgage so dont think ill receive 8k or any deposit..arrghhh im so confused
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