Help! Panic re buying new house and deposit

silvertree

We have just signed up to buy a new home by part exchange and put down a deposit of £500 today. We have to exchange contracts within 28 days and discussed the sale with the sales advisor. What she did not mention was the 10% exchange payment which is mentioned in the small print. It seems this is standard but I don't get it - the house is worth 210000 - are we supposed to come up with 21000 in the next 28 days? Even though we have not got the money from our house sale because its a px? Or is that advance made by the mortgage lender? When we bought our house I am sure we did not have that kind of money hanging around to pay on top of all the legal fees. I know this will seem a thick question but I am really in a panic - we can't just pop 21k out of thin air!

Any advice much appreciated.

noh

Yes you may have to come up with the £21000.
When I did a similar part exchange deal a few years back for a £212000 house I negotiated the deposit down to £10k.
Friends of mine who bought on the same development negotiated theirs down to 5k.
Depends on how desperate the developers are to sell the house.

mbga9pgf

If prices weren't rediculous, 10pc wouldn't be a problem. Welcome to the wonderful world we live in.

silvertree

Thankfully we have half of it saved in overpayments and the other half equates to the 10% that should be owed to us by the builders buying the house in PX. So surely we can use this towards the deposit?

I don't know how people manage if they have every penny tied up in a mortgage - its like being asked to hand over the money from the sale of your house without it actually being received yet!

princeofpounds

I'm not familiar enough with this part of the process to give you much advice, but if your money is locked up and you need access to it you will have to consider a bridging loan.

Graham1979

I would have thought that it should only be 10% of the difference between your purchase price and the p/x price that you need to find.

So if the new place costs 210k and your p/x is 110k then the difference is 100k and you'd "only" need to find 10% of that.

That's certainly how the developers I bought from with a p/x did it anyway.

DVardysShadow

silvertree wrote: »

Thankfully we have half of it saved in overpayments and the other half equates to the 10% that should be owed to us by the builders buying the house in PX. So surely we can use this towards the deposit?

I don't know how people manage if they have every penny tied up in a mortgage - its like being asked to hand over the money from the sale of your house without it actually being received yet!

Yes, the builders should give you 10% on yours, if that was agreed in their contract to buy

GarySt_2

If you have a problem speak to your solicitor or even the developer. There used to be ways to cover it on insurance. There are still schemes available when you search the internet.

Good luck