Deposit in chain

maunders

Hi , I am 2nd in a chain of 5. And have been told a deposit of 10% is needed throughout to complete the sale, as the house I'm buying costs more than the one I'm selling my solicitor has said I need to find £3600 to make the deposit 10% on the house I am buying. They are now closed for xmas and I need clarifying, if i pay this before exchange, will I get that money back when I complete? thanks

Thrugelmir

On completion your solicitor will account for the monies paid and received. Any excess will be returned to you at this point.

Foxy-Stoat_3

If your lender won't pay this now then you will have to, it will mean your mortgage is £3600 less.

What was the mortgage offer you received for the new purchase?

tBagpuss_2

The deposit is part of the purchase price. If your mortgage is for more than 90% then yes, you will get any surplus back.

Bear in mind you will have to pay things such as your solicitors fees, agents costs on your sale, and stamp duty (if applicable) so the money may be used for those things rather than returned to you direct, unless of course you have already provided the solicitor separately with money for those payments.

maunders

To clarify,

I am selling a property for £190,000. Current mortgage is around £119000.
Purchase price of new property is £226000, with mortage of £169000.
so from my sale I will have 71k equity, 57k of which will be going towards the house purchase, which should leave 14k of money left over for fees and the rest to come back to me.

I'm now being asked for the £3600, as presumably my buyer is giving 10% deposit of 19k and the rest is needed for my purchase deposit of 22.6k. I'm just wondering does that money come back to me after we complete!

pinkteapot

So, you'll be paying £22.6k now and £203.4k on completion day.

The mortgage amount of £169k will arrive with your solicitor and go towards that £203.4k. You'll therefore need to pay £34.4k for the house on completion, but this will come from the equity in your current house.

So, £71k less £34.4k leaves £36.6k. Your solicitor will then deduct from this the stamp duty, their fee, your selling EA's fee, and what is left will come back to you.

So, in effect, yes. What you pay out now will come back to you, in that you'll get more money back post completion than you expected.

Between exchange and completion your solicitor will send you a Completion Statement. This will set out all the money going in and coming out and will tell you how much you'll be getting back.

maunders

just to clarify I'll only be paying £3600 now because the other 19k will be coming from my buyer at the bottom of the chain. So I'll just get £3600 more than I had expected on completion?

Guest101

maunders wrote: »

To clarify,

I am selling a property for £190,000. Current mortgage is around £119000.
Purchase price of new property is £226000, with mortage of £169000.
so from my sale I will have 71k equity, 57k of which will be going towards the house purchase, which should leave 14k of money left over for fees and the rest to come back to me.

I'm now being asked for the £3600, as presumably my buyer is giving 10% deposit of 19k and the rest is needed for my purchase deposit of 22.6k. I'm just wondering does that money come back to me after we complete!

No it's part of ur purchase, so 226000 - 22600 = the balance paid on completion

maunders

I get you now!

maunders

pinkteapot wrote: »

So, you'll be paying £22.6k now and £203.4k on completion day.

The mortgage amount of £169k will arrive with your solicitor and go towards that £203.4k. You'll therefore need to pay £34.4k for the house on completion, but this will come from the equity in your current house.

So, £71k less £34.4k leaves £36.6k. Your solicitor will then deduct from this the stamp duty, their fee, your selling EA's fee, and what is left will come back to you.

So, in effect, yes. What you pay out now will come back to you, in that you'll get more money back post completion than you expected.

Between exchange and completion your solicitor will send you a Completion Statement. This will set out all the money going in and coming out and will tell you how much you'll be getting back.

wait sorry just confused about one point. you say that will leave me £36.6k before fees etc, does the 19k my buyer has paid not also get taken off that?

Guest101

maunders wrote: »

wait sorry just confused about one point. you say that will leave me £36.6k before fees etc, does the 19k my buyer has paid not also get taken off that?

Imagine it like this. The buyer is paying u 190000, giving u 19000 now and balance of 171000 on completion.

U are giving ur seller 22600 now and balance on completion. 2 seperate things.

Because ur buyer is giving u 19000, u are taking the extra 3600 out if ur bank