Exchanging with no deposit

frogula

We are buying a house that will either be 95% with a gifted deposit or 100% mortgage depending on what the seller accepts.

We were wondering how this works with exchanging as we are under the impression that you have to pay 10% deposit on exchange, but we simply don't have that money!

How would our situation work? Would we have to exchange and complete on the same day? I know people aren't very keen on that, but as our vendor is supposedly only moving up the road it shouldn't be too bad...

Any ideas?

djm1972

10% is only the recommended deposit on exchange, it's not set in stone or in fact required at all. If the seller knows that you are obtaining a 95% gifted or 100% mortgage for purchasing his property he should respond to his solicitors note regarding deposit with an instruction to exchange contracts without a deposit...

(but it would probably all get sorted out very quickly even if he hasn't specifically instructed this)

Liseyloo_2

You do usually pay a 10% deposit on exchange and there is usually a condition in the Contract to state that if the deposit paid on exchange is less than 10% and the Buyers withdraw after exchange that the Seller is still entitled to the forfeit of the full 10% deposit - although this is an unlikely (although not unheard of) scenario.

If you are getting a 5% gifted deposit you will need to advise your mortgage lender and get confirmation that they are happy with it

Many transactions go through with a nil deposit - although most of these tend to be simultaneous exchange and completion that all happens on the same day

HTH

sarah_elton

I had a 100% mortgage so we exchanged and completed on the same day. My solicitor told me that was standard practice with no deposit, and I wasn't worried about it being simultaneous because my lease wasn't up on my rented flat till two weeks later. My seller was moving in with his girlfriend so was relaxed too. It all went through on the day we agreed, got the phone call about 10:30am.