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Contract has an issue!
michsmit
Posts: 55 Forumite
Hi,
Im buying a new build and the contract has come through. One point states that if we complete and fail to pay the full balance an interest of 5% above base rate will be due daily on the remaining balance, is this normal? It seems an extraordinarily huge amount, what if the mortgage didn't get through to their account on time or something?!
Im buying a new build and the contract has come through. One point states that if we complete and fail to pay the full balance an interest of 5% above base rate will be due daily on the remaining balance, is this normal? It seems an extraordinarily huge amount, what if the mortgage didn't get through to their account on time or something?!
0
Comments
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It's a standard clause. I don't imagine it actually needs to be invoked very often though, and in any case it's 'only' about £25 a day on a £100k mortgage.0
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My solicitor seemed to think it would be 5% above base rate every day, so on 100k it would be 9.5% (ish) every day, so £9500 a day!!!
I asked if it was an annual rate charged on a daily basis, but they replied saying it was a daily rate?!
I don't plan on this happening but the risk seems to be huge if it's the latter scenario!0 -
Don't complete before your solicitor has the funds.0
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It what circumstances would you complete before the solicitor had all the funds?0
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It's an annual rate on a daily basis.
RiskAdverse1000 -
Sack your solicitor, he's talking nonsense!0
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I cannot imagine any occassion now where you would complete and fail to pay. The solicitor is there to stop that happening.
9.5% is £9500 divided by 365 = £26 a day.I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.0 -
Thanks for all your help and advice, the solicitor was adament that it was a daily rate and disagreed when I said "an annual rate calculated on a daily basis". The contract referred to standard conditions of sale, is that a legal document online or something I should request?0
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