When does the deposit have to be paid

wpearson92

Hi all,
Just a quick question as to when the deposit for the mortgage gets paid, me and my girlfriend have found our perfect house, the only trouble is its going to take around 4 months before we have our deposit ready.


We don't want to miss out on the property and having spoken to the mortgage broker he as left me under the word that he can slow down the application to give us the time to save up for the deposit, he says a mortgage offer lasts for 6 months and if we slow things down we will have enough.


Is this statement correct from my broker, or would I be better off waiting than putting in a bid for the house.


Ive been told it can take between 3 and 6 months to complete the purchase of the house

Tigsteroonie

What if something happens that stops you from having that level of savings in four months? (like a major appliance failure, or car breakdown) - you would be committed to buying but without the funds in place.

I seem to remember that we had to provide evidence early on that we already had the deposit in place, in order to convince the sellers that we were genuine.

Personally, I think you're better waiting until you have the deposit in hand before you start the buying process. But that's just my opinion.

Contemptuous

The deposit gets paid ready for exchange of contracts. It all really depends on how quickly the rest of the chain needs to move (assuming there is a chain..)

wpearson92

I'm at no risk of anything going wrong that will cost me a fortune.... I'm living with my parents while I save.
The property is a no chain property, it could be worth speaking with the estate agent and talk about who is selling the property and find me out about there circumstances with selling the house. the house as only been for sale for 1 month.
It's just we love it and don't want to miss out

Malmo

Deposit is payable when everyone in the chain (if there is one) exchanges contracts, at which point you are legally bound to the purchase.

Have a read of this MSE article which describes a simplified timeline and milestones of the buying process. It doesn't really factor in the complexities of a chain and the impact of that on the end to end process, but it is still useful as a guide.

stator

Yes, if you are taking out a 90% - 95% mortgage then your deposit is paid at the point of exchange. You then have to complete the purchase or you can be sued for unlimited costs (as well as losing the deposit). If your mortgage is less than 90% then it's just 10% deposit paid on exchange and then the rest is paid on completion.

Is the vendor of the house has to find their own place to move to then 4 months isn't unreasonable but you would definitely make them aware of it before hand.

However, after 4 months if you get the mortgage and move in, will you have any money left? What if the boiler breaks down? Or you need a new car etc? Will you have literally zero savings?

amnblog

If the Lender asks you to prove your deposit and you cannot do so - this will hold up your mortgage offer in any case.


Don't mess the vendor around.


Show some patience and wait until you have the funds.

goodwithsaving

You have offered on a place without the deposit funds ready. A one chain purchase can be quite swift. What if you don't have the funds in time? It's messing people about. You would normally have to provide upfront statements providing sufficient evidence of deposit saving / source to your solicitor (to ensure no money laundering has taken place).

" slow down the application to give us the time to save up for the deposit"

If I was the vendor, I would not be impressed.

"It's just we love it and don't want to miss out"

I see much nicer houses to the one we're buying but don't have the money so 'miss out'.......I don't try and buy them!

wpearson92

Ok thankyou for the advice,
I know it looks like i'm rushing, I just hope its still for sale in 4 months time.
I suppose I could always ask to borrow some money from my family, I always said I wouldnt want to, but for the sake of 4 months (the date id pay it back) it may be worth it

Malmo

wpearson92 wrote: »

I suppose I could always ask to borrow some money from my family, I always said I wouldnt want to, but for the sake of 4 months (the date id pay it back) it may be worth it

This will come under scrutiny by lenders, as funds are being sourced from relatives/family in this scenario.

Will the funds be a gift or a loan to be paid back (irrespective of interest)?

Red-Squirrel_2

The answer to this is to stop looking at Rightmove until you are in a position to make serious offers and proceed. If you'd never seen this 'perfect' house then 4 months or more down the line you'd have seen some other 'perfect' house and fallen in love with that one and never have been any the wiser about missing out on all the ones that were up for sale before you were ready to buy!

(I don't take this advice myself, in all honesty, but I know I should!)