What happens to the interest?

BeccaBell

Hello All!

My original exchange/completion date was last Friday. This has not happened however our deposit money and other money is all with the solicitor. I was wondering what happens to the interest this money is building? I assumed the solicitor kept it as I vaguely remember my mum saying this is how they made extra money. However when grumbling about this someone at work said that is not proper practice and I should get any interest back!

Does anyone in the know have an answer for me?

TIA

clutton_2

i have had interest back from a solicitor when there was a hold up

Colincbayley

What interest? With the bank base rate at 0.5% and the best savings rate at a little over 2.5%. The chances are the amount hasn't earned anything for you or the solicitor.

You say deposit and other monies. If your solicitor has drawn down your mortgage advance then you will be paying the interest on the loan from last Friday.

BeccaBell

Mortgage was sent back to the bank on Monday but yes I was aware that I had to pay it.

I have a large sum of my own mony I am paying but only £20k is deposit the rest is in addition totalling about £80k. It may not earn any interest but I was just wondering what happens if it did.

LittleMissAspie

Colincbayley wrote: »

You say deposit and other monies. If your solicitor has drawn down your mortgage advance then you will be paying the interest on the loan from last Friday.

I didn't know this. I assumed the money was transferred on date of completion and that's when you started paying interest. How do we know what date the mortgage was drawn down? Will the solicitor tell us?

Richard_Webster

My bank pays me 0.1% at the moment on my client account balances so interest on £100,000 for a day is 27p!

Our professional rules say we have to account to clients for interest when it reaches £20 so it is very rare these days that anyone gets any interest from us simply because we get very little ourselves.

sunshinetours

There are rules about de minimis amounts of interest the solicitor has to pay you, so if fior say the interest is less than £20 or £25 (can't remember) then you won't get anything as the admin involved in preparing tax certificates etc to give you a small amount isn;t worth it.
If there was a sufficient delay and you kept your money with the solicitor you could ask him to put it it on a designated depoist account and you would the be entitled to all the interest

To keep things in perspective - assuming the solicitor is getting around 0.5% interest on general accounts then £80k would be no more than around a £1 a day in interest! I also very much dount if solicitors are getting 0.5% either

EDIT - just see Richards post above which confirms from the horses mouth so to speak!

BeccaBell

LittleMissAspie wrote: »

I didn't know this. I assumed the money was transferred on date of completion and that's when you started paying interest. How do we know what date the mortgage was drawn down? Will the solicitor tell us?

I recieved a text from the bank to tell me the money had been released! My solicitor told me she was ordering my funds and that it would take 5 working days from ordering for her to recieve them.

Thank you for everyones advice, if it gets to the point where it reaches £20 (which if its earning less than 27p a day I hope it doesn't!) I'll add it to the bubbly fund!