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Help! I want to buy a house and don't know how!
Comments
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notanewuser wrote: »You're comparing apples with pears.
The above posters are unlikely to be putting down more than 10%.
It is the same deposit, you're just paying it over in 2 chunks instead of 1.
Exactly, they are not the same. The deposit for LTV purposes is different from the deposit you pay to the solicitor on exchange. Some or all of the funds will be the same.
When a solicitor talks about the deposit it is 10% to be paid on exchange.
When the lender talks about deposit it is your down payment.0 -
To get back to the OP after the intervening digression, I would suggest that you do a bit of research before you get too far into the house buying process, your local library will probably have a book on the subject, or you buy one, or take a look at websites such as this one:
http://www.which.co.uk/money/mortgages-and-property/guides/how-to-buy-a-house/0 -
'Deposit ' has two (confusing) meanings:
1) your mortgage lender speaks of a deposit as being the amount of your own money you put in - ie the difference between the purchase price and the mortgage amount. This might be 10%, 12%, 20%, 50% or whatever, depending on how much savings you have/
2) your solictor refers to the deposit which must be paid to the buyer at Exchange of Contracts. This is an 'advance payment' on the purchase (the balance paid at Completion). The amount is usually 10%, but can be reduced( eg to 5%) by agreement between buyer and seller.
IF the two 'deposits' are both, say, 10%, then yes, you simply use your 10% cash (deposit) to pay the Exchange 10% (deposit).
OP - the best thing you can do is go to your public library tomorrow and borrow a (free) book on house buying, which will answer ALL your questions over the coming months.
cross-posted with agrinnall !0 -
The 'deposit' for LTV purposes is not the deposit or even a deposit, it is equity.Exactly, they are not the same. The deposit for LTV purposes is different from the deposit you pay to the solicitor on exchange. Some or all of the funds will be the same.
When a solicitor talks about the deposit it is 10% to be paid on exchange.
When the lender talks about deposit it is your down payment.
The deposit paid on exchange of contract is the contract deposit.You might as well ask the Wizard of Oz to give you a big number as pay a Credit Referencing Agency for a so-called 'credit-score'0 -
'Deposit ' has two (confusing) meanings:
1) your mortgage lender speaks of a deposit as being the amount of your own money you put in - ie the difference between the purchase price and the mortgage amount. This might be 10%, 12%, 20%, 50% or whatever, depending on how much savings you have/
2) your solictor refers to the deposit which must be paid to the buyer at Exchange of Contracts. This is an 'advance payment' on the purchase (the balance paid at Completion). The amount is usually 10%, but can be reduced( eg to 5%) by agreement between buyer and seller.
IF the two 'deposits' are both, say, 10%, then yes, you simply use your 10% cash (deposit) to pay the Exchange 10% (deposit).
OP - the best thing you can do is go to your public library tomorrow and borrow a (free) book on house buying, which will answer ALL your questions over the coming months.
cross-posted with agrinnall !
This is what I was trying to say!0 -
But it is commonly called the 'deposit'.
And look where calling it a 'deposit' has taken this thread.Yes technically. But it's generally called a deposit.
If you revel in confusion, call the equity a deposit. But it really would help everyone just to call the 2 'deposits' different names.You might as well ask the Wizard of Oz to give you a big number as pay a Credit Referencing Agency for a so-called 'credit-score'0 -
And look where calling it a 'deposit' has taken this thread.
If you revel in confusion, call the equity a deposit. But it really would help everyone just to call the 2 'deposits' different names.
Yes good idea! Now tell that to mortgage brokers, mortgage companies, estate agents, solicitors etc...0 -
Unfortunately it's too late. For 10, 20, 40 years various professionals and non-professionals in the property business have been referring to a home-buyer's equity (or 'savings') as a deposit.And look where calling it a 'deposit' has taken this thread.
If you revel in confusion, call the equity a deposit. But it really would help everyone just to call the 2 'deposits' different names.
The confusion is here to stay!0
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