Deposit Question... A Silly one at that!

kategregory

Hey everyone,

We're hoping to become 1st time buyers in the near future!
We're just doing our homework before we jump in, my question sounds stupid really but would like to know!

Does the deposit you pay ie £10k get taken off the total amount you owe on the house you purchase, or is it held as (what's the word I'm looking for!?!)...Nope can't for the life of me remember the word I'm looking for is lets say security!

Thanks for your replies.

kingstreet

You pay your deposit to your solicitor in advance of exchange of contracts.

Your mortgage funds are obtained from your lender by your solicitor.

Your solicitor adds them together and pays them over to your vendor's solicitor.

The two figures added together = the purchase price of your new home.

You'll also pay some fees and other stuff too, of course.

ShAnE

IF House price = £100k
AND Deposit = £10k
THEN mortgage = £90k

So the bigger the deposit the less risk the bank has to take in lending you money for a mortgage hence the better rates of interest available.

Malmo

There was a helpful write up about deposits in a link posted by another Forum member.

I think it's this post.