Is only 5% deposit on exchange a problem for seller?

G_M

Humandoing wrote: »

Have you ever heard of the phrase, if you don't have anything nice to say don't say anything at all?!

That's a new one to me. Cheers! That's what I like about the forum, one learns all sorts of stuff much of it off the topic of housing.......

Humandoing

I am clueless about house buying. Learning as I go. I can only hope, one day, I will be as wise as you G_M

TBeckett100

Relax.

1) usually solicitors hold on to the deposit to it makes no difference. If vendors say no, the sale won't proceed and I suspect they want their inheritance

2) also, in a chain of people, typically the first deposit (let's say 10%) passes up the chain. Now, if each person in the chain is buying a bigger house, come the end of the chain, that deposit isn't going to be 10% now!

Humandoing

Thanks TBeckett100
Really hope I'm worrying over nothing. I hate the weekends when house buying.. Nothing gets done!

Ithaca

We were in a similar situation as a seller... a FTB couple buying our house and we were buying a probate sale. Although our buyers had a 10% deposit that wasn't enough to match 10% on the house were buying, and we were relying on the equity in our house to make up the difference (but obviously couldn't get hold of that until the sale went through).

Didn't matter in the slightest... just meant that had we pulled out after exchange we'd have been liable for the full deposit, so would have had to find the cash from somewhere, but the money stayed with the solicitors until completion day when it all moved around with the mortgage funds etc.

Our solicitor said it's completely normal these days so I wouldn't worry about it!

Freecall

Humandoing, the following is humour :

G_M wrote: »

"There, there. It'll be all right. Your seller will accept 5% & you'll be eating roast pork in your new home just as soon as you catch the flying pig....."

and this I recognise as sarcasm :

Humandoing wrote: »

I am clueless about house buying. Learning as I go. I can only hope, one day, I will be as wise as you G_M

Both forms of wit but subtly unalike.

moneyistooshorttomention

Fingers crossed for you.

I've been there/done that and had what amounted to precisely 3% deposit when I bought my starter house (LONG......story...that boiled down to about 30% was available for deposit purposes...but I only had about 3% of that in my possession personally).

It came as one heck of a shock totally out of the blue that I personally was still going to be expected to stump up 10% of the price I was paying for starter house personally. That meant - making my personal 3% available and wondering where the heck the remaining 7% was expected to come from (even though it was only going to be "lent out" for a few weeks in effect).

I managed it by skin of teeth basically - and I still think "why the **** didn't anyone tell me that though I wasn't the one going to be providing the deposit basically - it would still be expected from me for a few weeks?:eek::mad::mad::mad::mad::mad:".

In the event - my own personal savings (there for ME) just about managed to cough up the 7% missing deposit on a "loan" basis for a few weeks. But my plan was to just borrow the rest on a loan if it came to it....so I guess that maybe better be the Back Up Plan if it does come to it.

All these years later...and the Government still hasn't figured out the flaw in their flippin' schemes to help those with less than 10% deposit to deal with a situation like that...:cool::mad:

I have the vague idea (all these years later) that my Fallback Plan (ie if I had had to take out a loan to borrow that missing 7% temporarily) had been to go and get a loan from some bank/"bank" or other and that I "think" I could have "cancelled" the loan within the first few weeks and handed them back the amount I had had to borrow temporarily. After all these years - I cant be dead precise on that - but I seem to recall that was the fallback plan if it came to it.

Fingers crossed for you.

Humandoing

Thanks moneyistooshorttomention ��

What a stressful time that must have been. I'm not sure id be keen on the loan idea as I think some lenders sometimes do last minute credit checks? It would be a lot to find too (impossible) as it's quite a big mortgage.

j_yorks

I'm a bit concerned by this thread as we are buying on a HTB mortgage with 5% deposit - our contract doesn't say anything about transferring 10%, and there are lots of other threads on here where people are reassured and told that if you dont have the 10% then you dont have it.

Why was the above poster then forced to find the rest of a 10% deposit? This makes no sense as obviously noone with a 10% deposit would have organised a mortgage based on 5%, and most people wouldnt just be able to stump up that extra cash!

What even happens to the other 5% afterwards, since the mortgage covers 95% and that 95% will be provided by the bank at completion?

agrinnall

j_yorks wrote: »

I'm a bit concerned by this thread as we are buying on a HTB mortgage with 5% deposit - our contract doesn't say anything about transferring 10%, and there are lots of other threads on here where people are reassured and told that if you dont have the 10% then you dont have it.

Why was the above poster then forced to find the rest of a 10% deposit? This makes no sense as obviously noone with a 10% deposit would have organised a mortgage based on 5%, and most people wouldnt just be able to stump up that extra cash!

What even happens to the other 5% afterwards, since the mortgage covers 95% and that 95% will be provided by the bank at completion?

10% deposit at exchange has long been the standard, but it isn't set in stone, and if you don't have it make sure that your solicitor knows that early on so that either a lower deposit can be negotiated or the seller can refuse and you can withdraw from the purchase.

Not sure which previous poster you are referring to, the OP has not confirmed that they had to find more than the 5%, and moneyistooshort was in an entirely different situation.

I'd guess that if you handed over 10% and the mortgage provided 95% your solicitor would return the 5% overpayment to you at completion.