Exchange of Contracts, deposit & completion date HELP!

stinkypluff

Hi all,

We've received our hard copy of final mortgage offer today.I emailed my solicitor today to ask 1) Check they'd received the offer, 2) Their final invoice statement and 3) Their bank details for payment.

I received a call from the secretary asking me to make an appointment to go in and sign, to which I asked if we need to have our deposit and legal fees ready for the solicitors - She said my solicitor would go through this when I see him.....

I'm confused, I think we're supposed to exchange contracts next week and actually move in to new place on 27th april (completion day) - What is the process for payment etc?

Also when do you start paying the mortgage if the completion date is a few weeks after exchange of contracts?

Please excuse my garbled scrawl, I have flu and I'm a little out of it!

G_M

First you need to sign the contract in preparation for Exchange. When you go in to do this your solicitor will explain the rest of the process, discuss dates etc with you.

Exchange is done when all parties, all the way up the chain, are ready. It is done by the solicitors on the phone to each other - but they all have to have their clients' signatures on the contracts.

At Exchange, a 10% (sometimes less) deposit is paid by the buyer. You will need to get this amount to your solicitor in advance of Exchange. A cheque takes time to clear. A CHAPS payment from your bank is same day, but costs £25-35. Many banks will now let you do a 'Faster Payments' transfer, same day, but check with both your bank AND your solicitor's bank esp as some banks have a limit which may be less than the 10% you need to transfer

Completion is usually week or 3 later (you can agree this with your solicitor if you have a preference). Your mortgage lender will send the mortgage money to your solicitor on the day of Completion (or day before). You will start being charged for the mortgage from that date.

Until Exchange, bear in mind that all dates are provisional. Any number of things could delay Exchange and/or Completion.

Lovelyjoolz

G_M wrote: »

Many banks will now let you do a 'Faster Payments' transfer, same day, but check with both your bank AND your solicitor's bank esp as some banks have a limit which may be less than the 10% you need to transfer

When I bought a house in December, I was told that the limit for Faster Payments was £10,000. However, I was still able to use the system by paying two amounts, on of £10k and one of £18k, so there is a way around the limit.

Good luck!

stinkypluff

Just to test my understanding.....
So we have to sign a preliminary exchange of contracts? Then a few days later we have the deposit ready and THEN we exchange contracts?

I've contacted the bank & we can transfer the deposit in increments of £10K too

G_M

stinkypluff wrote: »

Just to test my understanding.....
So we have to sign a preliminary exchange of contracts? Then a few days later we have the deposit ready and THEN we exchange contracts?

I've contacted the bank & we can transfer the deposit in increments of £10K too

Yes,, and no...

There is no 'preliminary exchange of contracts'. There is just a single contract. Your solicitor draws it up and you sign it (It cannot be 'Exchanged' if you have not signed it!).

You also send the deposit to the solicitor. You can do this any time in readiness. Today; at same time as signing the contract; later; But as with the signature, your solicior cannot 'Exchange' if he does not have the money!

Then at the correct time, the contract is Exchanged by your solicior with the seller.

edit: do not confuse signing the contract with commiting yourself in any way. You can still withdraw at any time up to Exchange (just make sure your solicitor knows!). It is only when the contract is Exchanged by the solicitors for buyer and seller that there is legal commitment on both sides to the contract.