how much deposit to move to solicitor and when?

westy_1981

hi all, bit of background;

we are in the process of buying a property.

Received confirmation from our solicitor today; looking to exchange on monday next week and complete on friday of next week - works well for us and property is empty so should be no problem for vendor.

We are paying deposit to our solicitor on fri (this week) - due to be 10% of total house price and then a further 5% of total price next week prior to completion. (Total 15% deposit as our LTV is 85%).

The deposit will be paid via CHAPS so will cost £30 a time.

What are the advantages / disadvntages of paying in 2 seperate payments or should we just ask the solicitor and pay all of the 15% is one go???

Thanks very much in advance

WestonDave

At current interest rates you'll be lucky to get £30 interest on your remaining 5% so I'd send it all in one go - provided its not over the FSA deposit protection ceiling it will be safe with the solicitor as it will be in a ring fenced client account. It also means that its there in good time for completion - last thing you want is it falling down due to some glitch and you getting clobbered for penal interest on late completion!

(That's assuming the sums involved are too high to send via a couple of faster payments transactions for free!)

However it worth bearing in mind that you'll need also to send in money for solicitors costs, stamp duty etc before completion so you may want to ask them for a completion balance if you are going to send it all in one go otherwise you might find you send your 15% but have to send another chunk for the costs etc.

FireWyrm

I have non idea why you are paying two separate installments. Did he ask for this? Is there some other background here? Personally, I'd push for one payment with a CHAPS fee of £30 and be done with it. The money should go into the solicitos' holding account so I see no reason why you are paying in installments although I'm happy to be corrected by the solicitors on the board.

G_M

If there's only a week or so between Exchange and Completion you might as well do it in one transfer. The extra interest you might earn on an extra week in your bank will be eaten up by the CHAPS fee.

Or check if your bank AND the solicitor's bank support Faster Payments. It's free. It's same day. But there's a limit on how much at a time (depends on your bank) so you might have to do several transfers on consecutive days.

timmyt

westy_1981 wrote: »

hi all, bit of background;

we are in the process of buying a property.

Received confirmation from our solicitor today; looking to exchange on monday next week and complete on friday of next week - works well for us and property is empty so should be no problem for vendor.

We are paying deposit to our solicitor on fri (this week) - due to be 10% of total house price and then a further 5% of total price next week prior to completion. (Total 15% deposit as our LTV is 85%). that is gibberish. You need give your solicitor the purchase price, plus legal fees as quoted originally, less the net mortgage released to the solicitor. They will have sent you a statement. YOu can send 10% of the purchase price first but with completion so close, obviously send it all in one go.

The deposit will be paid via CHAPS so will cost £30 a time.

What are the advantages / disadvntages of paying in 2 seperate payments or should we just ask the solicitor and pay all of the 15% is one go???

Thanks very much in advance

good luck op

westy_1981

timmyt - please can you elaborate on the red writing you have added to my OP. I appreciate that it may seem like "gibberish", but as a FTB I am learning as I go!

We have obviously had a quote for the solicitors costs etc so know what to expect, but have not received a statement of final costs etc from the solicitor - I expect it to arrive tomorrow / Friday with contracts etc.

The intention is to pay a 15% deposit (our total deposit on the property) to the solicitors via CHAPS on Friday (following advice from posters on here). The solicitors fees etc will be paid next week via a normal bank : bank transfer.

Grateful for your / anyone else's thoughts / advice

timmyt

westy_1981 wrote: »

timmyt - please can you elaborate on the red writing you have added to my OP. I appreciate that it may seem like "gibberish", but as a FTB I am learning as I go!

We have obviously had a quote for the solicitors costs etc so know what to expect, but have not received a statement of final costs etc from the solicitor - I expect it to arrive tomorrow / Friday with contracts etc.

The intention is to pay a 15% deposit (our total deposit on the property) to the solicitors via CHAPS on Friday (following advice from posters on here). The solicitors fees etc will be paid next week via a normal bank : bank transfer.

Grateful for your / anyone else's thoughts / advice

Like I say:

- the lawyer takes two payments from you, 10% of the purchase price to fund the deposit, and then the balance of what you need to pay being (purchase price plus all the originally quoted legal fees, less the net mortgage released to him, less the 10% you paid). the first payment is a few days before exchange and the second a few days before completion, but with them being so close, just pay the lot they ask for now. dont you decide what to pay, ask them.

It would be easier to understand if you stop thinking of 15% and LTV.

If your lawyer has yet to send you a final statement (worrying that you have not had one yet as I do them very early

FireWyrm

Hi Westy

What Timmy means is that on Friday, when you send over the deposit, you will also send the solicitors fees as well. The solicitor doesn't actually take the final payment yet, until completion, but you usually lodge it with them at the same time as the deposit transfer.

Essentially, the solicitor will have worked out the deposit (15%) plus his fees, plus disbursements such as stamp duty and this is what you need to send him. The mortgage gets drawn typically 4 days to a week ahead of time, so he is expecting your mortgage funds to be on deposit with him along with your deposit, fees and disbursements on completion day. This is how it works. You pay him on exchange day, not completion day.

timmyt

and - all sensible conveyancers make sure they ask for the mortgage the day before completion - to avoid delay on the big day.