Hypothetical scenario

ReadyPlayerOne

Hypothetical scenario:

Background:

You are a FTB – taken years to save due to high rent - just about to exchange – You have scrimped and saved all fees monies and deposit ready. Mortgage is all sorted and will be significantly less than your rent. House is great steal due to a very motivated seller (moving abroad for work, who are subsiding his losses but with strict timescales) at price reduced to the equivalent of a 2 bed flat prices in the local area. Due to the above both sides are motivated so the sale moves along at the speed of light. All good so far.

Exchange is imminent but due to totally random and unforeseen event, you suddenly need to pay out a chunk of money. Its non-negotiable, not something of your making, just one of those things. Not loads but not chicken feed either. If this happened in normal circumstances it would come out of your savings or at a push maybe an emergency credit card or go into the overdraft however as a FTB you can’t use credit as it will affect the mortgage offer and all savings are sunk into to deposit/fees. So you are stuck.


Question

As the house is such a great deal you still want to exchange and move to completion – but want to delay your stamp duty payment by a few months (2/3 months would totally resolve the shortfall)

There is a fine of £300 but it’s much less than you lose pulling of the sale (sols, surveys etc.) and will lose you the best house you have ever seen in your price range.

How would that work in the real world…

Guest101

you suddenly need to pay out a chunk of money. Its non-negotiable, not something of your making, just one of those things. - I'd love to hear more about this:


as a FTB you can’t use credit as it will affect the mortgage offer and all savings are sunk into to deposit/fees. So you are stuck. - This is the same regardless if you are FTB or not


How would that work in the real world… - You'd pay the fine....

marksoton

I doubt your solicitor or maybe even your lender would allow this sale to complete in these circumstances.

chelseablue

I thought stamp duty had to be paid on completion otherwise the solicitor wont complete the purchase?

mrginge

your solicitor is required to hold the funds for stamp duty before completion.
Cml handbook 10.4

ReadyPlayerOne

So there would be no issues with the Sols, land registry or the mortgage company if you have a short delay paying the stamp duty?


I have deliberately left the reasons for the emergency payment vague to get away from any debate. I know you guys LOVE a good debate but it does sometime derail from the issue

Lungboy

ReadyPlayerOne wrote: »

So there would be no issues with the Sols, land registry or the mortgage company if you have a short delay paying the stamp duty?

That appears to be the exact opposite of what everyone has said.

AdrianC

So, lemme get this straight, without the unnecessary and confusing guff.

Just before exchange, you're faced with a bill that you can't pay AND leave yourself enough money for your portion of the purchase price. If you get credit and pay the bill, you fear you will no longer meet the mortgage affordability criteria.

So the remaining choice is to ignore the bill for the meantime...?

OK, so let's say that the debt doesn't progress to court before exchange and completion.
Once you've completed, will you then be planning on getting credit somehow to pay this debt?
You could rob Peter to pay Paul, and leave the taxman short of the SDLT payment, but the tax man is rarely a forgiving person to owe money to...

Person_one

ReadyPlayerOne wrote: »

I have deliberately left the reasons for the emergency payment vague to get away from any debate. I know you guys LOVE a good debate but it does sometime derail from the issue

That's a bit silly, there may be people on here who can help you find a way to delay or spread out or challenge that payment. You might think its absolutely non-negotiable but some on here may well be more knowlegeable, it does happen!

ReadyPlayerOne

if its the case that a sale can not complete without payment how come there is a late payment charge up to three years?


cant post links but the .gov notes this

Guest101

ReadyPlayerOne wrote: »

if its the case that a sale can not complete without payment how come there is a late payment charge up to three years?


cant post links but the .gov notes this

Cash buyers self conveyancing