Second time buyer...how do I pay deposit?

smfdurham

Hi, we're looking to sell our flat and buy our second home. We'll have a good amout of equity to get from the flat when we sell but we only have around £15k in savings which is no where near what we need to pay the deposit on the new home (when we find it)

What is the process? And can I use the equity from the flat sale to fund the deposit on the new home? And the stamp duty for that matter

Thanks

Simon

stator

The deposit paid on exchange would be the problem, it would depend on the person you are buying from, they might be happy to wait for the deposit (probably not), or accept a reduced deposit (maybe 5% instead of 10%). Otherwise you might need a bridging loan. The 'deposit' on the mortgage can be paid with the proceeds from your sale, as can the SDLT.

G_M

Stamp duty is due within 30 days of Completion. You can use the sale proceeds (or other cash).

Usually the deposit you receive on Exchange from your sale is used as the deppsit on your purchase. If you are buying a more expensive property, it is common to agree a smaller deposit on your purchase, equal to the 10% you are receiving on your sale. this gets passed up the chain.

If you are using a solicitor/conveyancer, he will negotiate this for you (ask him!).

If you are doing the conveyancing yourself, you'll have to negotiate it yourself.

PasturesNew

As has been said by G_M above - you usually don't need any deposit in hard cash. As you're selling/buying, presumably on the same date, it's just glossed over and there is no actual deposit as such. It all happens by magic, so long as there's enough leftover from your sale etc.

It's a virtual deposit, it exists only on paper, not in pound notes on the table.

smfdurham

Brilliant advice thanks everyone

System

I asked this recently to my mortgage advisor and was told only the bottom of the chain pays and then it gets 'recycled' through the chain and soliciotors between themselves agree on percentages.