Have Mortgage offer but no deposit

mair1

have received mortgage offer for 100% of agreed sale price - but being FTB and getting 100% mortgage means we have no deposit. Is this going to be a major problem?

herbiesjp

If you have a mortgage offer for a 100% mortgage you do not need a deposit

mair1

How will it work when we come to exchange contracts then ? everything I seem to search up on internet has lead me to believe that we have to put something down upon exchange

Jorgan_2

You will need to get the chain you are involved in to agree to exchange without a deposit. Some solicitors aren't happy to do this so they exchange & complete on the same day. Some buyers aren't happy with this. Speak to your solicitor soo that they can check up the chain to see what people want to do.

Bernard_Coleslaw

That's because most bits of advice on the internet are written around the traditional "95% or less" mortgage approach, where you would pay your deposit to your solicitor in order for contracts to be exchanged. As you're not paying a deposit this shouldn't apply to you.

Be aware that your solicitor may want some or all of their fees at exchange time, however.

BC

mair1

Thanks, we have the money to pay solicitors and stamp duty so can do that without a problem it was the deposit bit that was confusing me. Its our understanding that vendors already have completed chain but are just waiting on us (last buyer let them down) and we have moved fast in getting survey done and chasing mortgage offer and are prepared to move as son as they want - even though that will probably mean us paying rent (they want to move pretty fast) so I hopefully they would be prepared to exchange without a deposit - what do you think?

mair1

sorry meant extra rent in the overlap period

hazeyj

:A Or your sols can request your mortgage funds at any time they choose so that they have acess to the funds at the exchange stage. I doubt whether you can actually exchange without a deposit. Or you may be able to exchange and complete on the same day. This is a problem for your sols anyway..good luck!

Debt_Free_Chick

Yes you can exchange without a deposit. It's worth speaking directly to the vendor and telling them that you have your mortgage offer and that it's for 100% so there will be no deposit when you exchange. They should not object if you have a mortgage offer - I would even offer to give them a copy so they can see it's legit.

There's no real reason why a deposit is needed to exchange except this ... if you pull out of the purchase after exchange, the deposit is paid as "compensation" to the seller. In your case, there will be nothing for them to retain and they will have to rely on you finding the "compensation" and potentially pursue you for redress.

Other than this, you can simply exchange and the seller will get their money when you complete.

All is OK if you fully intend to go ahead. The only difficulty is for the seller if you pull out AFTER exchange - but let's face it, who does that?

HTH

robwend

im confused about all this deposit stuff,my buyers are ftbs so im using there deposit to give to my purchase, but what would i have done if i didnt have ftbers? i dont have a few grand knocking about, coz it all tied up in property? how does it work then guys?
xxwendyxx

hazeyj

robwend wrote:

im confused about all this deposit stuff,my buyers are ftbs so im using there deposit to give to my purchase, but what would i have done if i didnt have ftbers? i dont have a few grand knocking about, coz it all tied up in property? how does it work then guys?
xxwendyxx

Your sols wil take ten% of your mortgage funds as the 10% deposit. They can request your mortgage funds any time they like with your permission, but obviously you will have to start paying your mortgage back from the release date so its better to exchange and complete on the same day if you have got the deposit from your own money.