solicitors asked for 10% exchange deposit

Pixiebee_2

I am on the way to, fingers crossed!, exchanging on my first property.
I received an email from my solicitor with contracts and reports and a request for a 10% deposit for exchange. They said this was standard in UK an Wales. Now I am some what confused as I thought this was 5%?
The total,property price is 112,500. I have an offer for a95% mortgage for 106,875 ( Leeds).
We have a cash savings of cover the 5625 as we expected.
Is it standard to pay seller an extra 10% as well as the 5% mortgage deposit? I am so confused as surely seller doesn't make any extra over asking price.

I would ask my solicitors but they are closed for the weekend!

Any help muchly appreciated.

Thrugelmir

Your vendor may be asking for 10% on exchange as is indeed the normal amount.

PasturesNew

The mortgage deposit is the deposit and paid to the solicitor.
As you're only giving a 5% deposit, that's what you give to your solicitor.
Solicitor etc will realise that you're only giving 5% and it'll be OK.
If something horrendous occurred between exchange/completion and you didn't want to go ahead/pulled out/whatever, then you'd have to cough up the difference to 10% as part of them suing you etc.

So, just speak to your solicitor, say "5%", they'll say "Ah, yeah, sorry". And that's the end of it for you. Solicitor holds your 5% mortgage deposit and gets the other 95% from the lender.

There is only one 5% from your point of view ... all the rest is just wording and a tiny mistake by your solicitor when they asked you for 10%

Pixiebee_2

Thanks so much! Put my mind at rest. It is share to buy and it was the housing association ( the vendor) that requested 5% so think just an oversight on solicitors part.

Pixiebee_2

Thrugelmir wrote: »

Your vendor may be asking for 10% on exchange as is indeed the normal amount.

If this is indeed the case and we pay 10% now, would we get 5% back when the funds come through from lender?

ethank

It is up to the vendor on whether they will accept 5% deposit, instead of 10% - ask your solicitor to speak to the vendors solicitor.

On completion, you will receive a completion statement - any amounts over that required to complete will be returned to you, so if you paid 10% now and this left you with 5% over - this balance would be returned to you.

kingstreet

In the days of 100% mortgages, it's a wonder any transaction ever completed...

Gentoo365

I thought that they request the extra 5% from the bank early. Which results in a bit of extra interest as you have £5 or so of the money for an extra few days.

Maybe not.

In the days of 100% I thought the same. i.e. the lender release 10% early.

kingstreet

Convention built up over years is that 10% deposit is paid on exchange.

However, as time has passed there can often be no deposit paid (on 100% mortgages for example) or if the mortgage is a 95% mortgage, the 5% changes hands instead.

Lenders never release any money before completion and in a chain, the deposit from the first purchaser passes up the chain becoming a smaller percentage of the higher purchase prices so vendors relying on equity from their sales don't have to inject cash to enable exchange to take place.