FTB Help

akbowles

Hi

I have been looking at the steps to buying a home for the first time and have come across it saying that on exchange day, I have to pay a deposit to the solicitor, 5-10% of house value. Is this an extra fee I have to pay or does it come from the mortgage company?

Thanks

Adam

Doshwaster

akbowles wrote: »

Hi

I have been looking at the steps to buying a home for the first time and have come across it saying that on exchange day, I have to pay a deposit to the solicitor, 5-10% of house value. Is this an extra fee I have to pay or does it come from the mortgage company?

This is a fee you have to pay as part of your deposit. If your deposit is going to be, say, 15% then you will be asked to pay 5-10% on exchange day as a financial commitment to show you are serious and then the outstanding amount (plus legal fees) on completion.

akbowles

Thanks,

Is that 5-10% of your 15% deposit, then the remainder of the deposit on completion?

Does the solicitor then pay this to the mortgage lender?

lilac_rainbow

It's only been 2 years since we did this & I can't remember what we did now. It's 5-10% of your house purchase price not of the deposit. If your LTV is high then you should get away with paying the lower but I think you take your cheque into the solicitors (if I remember rightly)

ERICS_MUM

akbowles wrote: »

Thanks,

Is that 5-10% of your 15% deposit, then the remainder of the deposit on completion?

Does the solicitor then pay this to the mortgage lender?

It's 5 - 10% of the 15%, meaning that you would then pay the remaining 5 - 10% on completion.

Your solicitor will pay it to the seller's solicitor, who will release it on completion (usually to the company providing their mortgage for their next property.) Hope this makes sense !

It's a good idea to understand the whole process, not just your part in it but how the whole chain works and how it could go wrong.

Good luck. :T

Yorkie1

ERICS_MUM wrote: »

It's 5 - 10% of the 15%, meaning that you would then pay the remaining 5 - 10% on completion.

Your solicitor will pay it to the seller's solicitor, who will release it on completion (usually to the company providing their mortgage for their next property.) Hope this makes sense !

It's a good idea to understand the whole process, not just your part in it but how the whole chain works and how it could go wrong.

Good luck. :T

This is right but has the potential to be read ambiguously.

If your mortgage is 80% LTV, then your overall deposit is 20% of the purchase price.

On exchange you supply 5 - 10 % of the purchase price as a preliminary deposit, leaving the balance of the overall deposit, i.e. the remaining 10 - 15 % of the purchase price, to be paid on completion. It's not 5 - 10 % of the overall deposit amount.

So, say, your purchase price is £100K, your LTV is 85%, and you pay 10% deposit on exchange. On exchange you pay the solicitors £10K, and then pay the balance of £5K of the deposit on completion.

JQ.

ERICS_MUM wrote: »

It's 5 - 10% of the 15%, meaning that you would then pay the remaining 5 - 10% on completion.

Your solicitor will pay it to the seller's solicitor, who will release it on completion (usually to the company providing their mortgage for their next property.) Hope this makes sense !

It's a good idea to understand the whole process, not just your part in it but how the whole chain works and how it could go wrong.

Good luck. :T

No it's not. It's 5-10% of the full purchase price. So if the OP is paying £200k for the house they have to provide £10,000 to £20,000 upon exchange.

Doozergirl

Why does it say 5-10%?

Ths standard is 10% of the purchase price payable on exchange. For it to be any less (usually where the LTV is higher than 90% and you physically don't have the cash), it would have to be by special arrangement and agreement with the vendor.

Doshwaster

Doozergirl wrote: »

Why does it say 5-10%?

Ths standard is 10% of the purchase price payable on exchange. For it to be any less (usually where the LTV is higher than 90% and you physically don't have the cash), it would have to be by special arrangement and agreement with the vendor.

I have just checked the paperwork for the house I bought in June. I did indeed pay exactly 10% of the purchase price on exchange then the remainder of the deposit + legal fees on completion.