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Interest charged when purchase fell thru
jesuisbrill
Posts: 4 Newbie
Is this situation an unlawful interest charge? Released equity from existing house to purchase second house. Funds released to solicitor, exchange delayed then vendor withdrew the house. Solicitor held money for 10 days. Abbey charging £325 interest, solicitor calculated earned £125 and asking me to pay difference. Mortgage interest only at £500 per month. Surely this interest is an outragous amount. Has anyone out there had this experience and reduced the interest paid?
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Comments
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In those amounts there is probably fees for other items, like CHAPS for transferring the money. You need an itemised bill to examine in more detail.
Why did the money get transferred before you had exchanged?I'm a Forum Ambassador on the housing, mortgages & student money saving boards. I volunteer to help get your forum questions answered and keep the forum running smoothly. Forum Ambassadors are not moderators and don't read every post. If you spot an illegal or inappropriate post then please report it to forumteam@moneysavingexpert.com (it's not part of my role to deal with this). Any views are mine and not the official line of MoneySavingExpert.com.0 -
jesuisbrill wrote: »Released equity from existing house to purchase second house.
Released equity = borrowed money (mortgage) so, yes, you would pay interest from the day that the money was released.Warning ..... I'm a peri-menopausal axe-wielding maniac
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Unfortunately, sometimes there is such a rush that the money has to be drawn down even though contracts have not been exchanged, even though there is a risk of this kind of charge being made. Contracts are not exchanged because some legal issue has not yet been sorted out.
The solicitor should have warned the client that this kind of thing was possible, and only proceeded once the client clearly understood they would have to pay the interest if the transaction didn't go ahead.
The alternative would have been to have sorted out all the details and then exchanged contracts with another week or so left before completion to get the money.
As a conveyancing solicitor I believe the information given in the post to be useful but I accept no liability except to fee-paying clients.RICHARD WEBSTER
As a retired conveyancing solicitor I believe the information given in the post to be useful assuming any properties concerned are in England/Wales but I accept no liability for it.0 -
The solicitor did not inform me that I would incure charges from Abbey, should I refuse to pay the solicitor !? I have asked for an itemised bill to check the amount. Lesson learned about having everything sorted before transferring the money. Thanks everyone for their input0
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