Exchange of contracts - 10% deposit?

hazeyj

I would of thought that the mortgage people would be understanding in the sols req an advance on the mortgage for exchange? Isnt that the whole point of a 100& mortgage?

Isnt this what happens with every purchase? Ive never paid deposit monies from my own pocket without being aware of it first. Maybe the completion statement would explain where the 10% is coming from?

hazeyj

Dasnookster wrote:

This has just happened in our chain.

Basically we have FTB's buying our house who are having 100% mortgage so they have no deposit. All our equity is tied up in the sale of our property, so we have no deposit until the money comes through on completion, originally we were told that was fine as the deposit from our buyers would pass on up the chain - that's before everybody realised the FTB's didn't have a deposit.

Our solicitor wrote to us and gave us two options - either we proceed without a deposit (which is something our sellers had to agree to as well) or we would have to exchange and complete on the same day.

There were four links in our chain and everyone said they would rather proceed without a deposit than exchange and complete on the same day, so that is what has happened.

What this means is that should our buyer pull out, there will be no deposit money to claim and we would have to sue them independently.

Blimey, wasnt that a bit risky?

Bossyboots

hazeyj wrote:

I would of thought that the mortgage people would be understanding in the sols req an advance on the mortgage for exchange? Isnt that the whole point of a 100& mortgage?

Isnt this what happens with every purchase? Ive never paid deposit monies from my own pocket without being aware of it first. Maybe the completion statement would explain where the 10% is coming from?

For the mortgage company to provide the deposit, they would be lending without security. If completion didn't take place the deposit is lost and their only way recover it would be to sue the mortgagor, assuming they hadn't done a runner in the meantime.

Dasnookster

hazeyj wrote:

Blimey, wasnt that a bit risky?

Yes, I guess so.

Moving Thursday, so fingers crossed nothing goes wrong.

For us it was the better option - I really couldn't bear the thought of exchange and completion on the same day - to pack everything up, load the lorry up and then find that someone has pulled out while you are waiting for the exchange to take place.

Obviously I realise that could still happen and we wouldn't get any money, but to me it feels slightly more secure.

hazeyj

Bossyboots wrote:

For the mortgage company to provide the deposit, they would be lending without security. If completion didn't take place the deposit is lost and their only way recover it would be to sue the mortgagor, assuming they hadn't done a runner in the meantime.

There are mortgage companies that allow a deposit upfront or see your bank to see about a bridging loan or borrow from family??

dollarjon

when we bought our house 5% of our 100% mortgage was an unsecured loan and that is what was used for the deposit on exchange of contracts with NR btw