mortgage funds released before exchange - is this right?

flutterby_3

I've just found out that our solicitor called for our mortgage yesterday and according to our lender, our account is now live and accruing interest. The only problem is that although we are hoping to complete next friday, due to a number of issues, we have not yet exchanged contracts!
Does this sound right? What happens if the purchase falls through (we're only buying) or if completion ends up being a couple of weeks off - do we pay interest as of yesterday?
Also, we have not yet taken out buildings insurance but the lender says our account states that we have insurance!! I guess this has come from the solicitor - has he told porkies to the lender?

Any advice or comments would be helpful eg do i need to ask the sol what on earth he's playing at or does it sound ok??!!

silvercar

I would ask your solicitor why he called for the money so early. It is normal to call for it the day before completion to ensure it is in place for completion day. A week and a day seems excessive.

If the solicitor holds your money in his client account for more than a week he will need to account to you for the interest, so you will get some help with the first mortgage payment.

If the completion gets delayed or falls through, the money will be sent back to the lender.

You should have insurance in place from exchange of contracts, your solicitor is assuming you will do so.