Conveyancing query

marksoton

TolsBols wrote: »

Thanks Mark. But I'm not sure the lender is the issue here. We already have the agreement processed with them.

My issue now is with the conveyancer, who we are appointing ourselves and not going through a lender's solicitor. Not declaring if the money is gifted means I avoid those additional fees and the extra proofing hassle.

There is no grey areas regarding the loan. I know for a fact my family have that money in their funds and it would just go into my account and I could see through the purchase with no issue. They would then be paid back with the equity once my flat sold. So is it really an issue if I don't mention that to the conveyancer?

So long as he sees I have the funds in my account, would he raise eyebrows or would he want to know where it came from? As another poster implied, I don't want to commit fraud.

You have two issues here.

The lender will no doubt have assumed you are not borrowing money for the deposit.

Your solicitor will have to satisfy themselves as to the source of funds for money laundering purposes.

I don't really understand why you can't align completion on your current property and the new one thereby negating all this carry on?

davidmcn

TolsBols wrote: »

So long as he sees I have the funds in my account, would he raise eyebrows or would he want to know where it came from?

See post #4.

sam2015_2

Did you said to your mortgage application the deposit is coming from your flat's sale?
Have you receive your mortgage offer? Is there any condition on it?
Usually if you are selling to raise deposit for your purchase , the lenders put condition or ask for proof ..on completion of this purchase you paid off your current mortgage.
If you complete on your purchase before selling your flat, at the end of the transaction you will have two properties and therefore your conveyancer will ask for the extra 3% stamp duty on your purchase.

SmlSave

Shoot me but I would and did. And would do again.

TolsBols

marksoton wrote: »

The lender will no doubt have assumed you are not borrowing money for the deposit.

Your solicitor will have to satisfy themselves as to the source of funds for money laundering purposes.

I don't really understand why you can't align completion on your current property and the new one thereby negating all this carry on?

You are correct on the first count and as davidmcn also affirms, it's seeming likely the conveyancer shall want to check my funds as well.

Aligning completion on both of our properties is what I'm hoping to achieve. This query of mine is in the scenario whereby the purchase is ready to complete and the sellers don't want to hang around. I recieved a good offer for my flat yesterday and if his financials add up, the ball may well be rolling next week so we shall see.

sam2015 wrote: »

Did you say in your mortgage application the deposit is coming from your flat's sale?
Have you receive your mortgage offer? Is there any condition on it?
Usually if you are selling to raise deposit for your purchase , the lenders put condition or ask for proof ..on completion of this purchase you paid off your current mortgage.

Thanks for responding. I think I did say in the application that the deposit would come from the flat's sale. It was all processed last week and we are waiting for the mortgage offer to come through now.

SmlSave wrote: »

Shoot me but I would and did. And would do again.

SmlSave - what do you mean? Did you not declare to the conveyancer where your funds were coming from? If so, did the conveyancer ask any questions??

Hoploz

Try and marry up the two transactions. Otherwise very over-complicated legally, however easy it is for you in practice. Your seller tbh doesn't need to know that your sale is a couple of weeks behind the purchase. The only time the seller will query anything is after a period of non-communication when they contact to ask why you haven't exchanged. By which time hopefully the sale will be within a hair's breadth of exchange also.

Every chain has its secrets. My seller was apparently moving in to rented, until the date she had proposed for exchange was missed (due to her not providing necessary paperwork) and it suddenly came out that she was doing her nut as she had a forward transaction as well. I don't know whether she lied on the seller's form where she had ticked that there wasn't a related purchase, or whether she only found a house during the proceedings and her status changed.

Shahni

Just to clarify, the mortgage isn't all agreed and now irrelevant. An agreement in principle is just that: in principle, they would agree to lend you this much. They will then do a valuation of the actual property and give you a formal mortgage offer. But again its not all tied up. They will then rely on your solicitor (normally, unless they have appointed their own) to do all the legal checks and make sure there are no legal problems which may affect their security. Once they've done that, the solicitor will send them a certificate of title to certify they have done all the checks and can certify the title is good. Your lender will then release the funds for completion, you will sign the mortgage deed and then the mortgage is completed. Up until that point it can be withdrawn at any time.

One of the things your solicitor needs to check is the source of your funds. If the funds are from further borrowing they need to report this to your lender because it will affect their security. If you default on the mortgage and your lender needs to repossess the property and sell it, they will not want anyone else to have an interest in the property because that will complicate matters and reduce the possibility of them recouping the full amount you owe. Your solicitor is under an obligation to report any relevant matters to your lender, and if this puts them in a position of conflict of interest they will need to stop acting.

The solicitor is acting in your best interests. Concealing information from them could be harmful and could lead to you committing mortgage fraud.

As an aside, it sounds like you are using a cheapo conveyancer, perhaps one linked to the estate agent? Cheap basic fees then an addition fee here, there and everywhere. That's probably an error.

sam2015_2

Some solicitors will ask to see the proof of where the money come from. Some don't.
Wait for your formal mortgage offer then ask your solicitor what document he required. Also ask about the possibility of using the money from your family if the sale of your current property delayed. Best to be upfront and be prepared. last minute surprises are not good.
Are you using the same conveyancing firm for buying and selling? I have heard if you are using the same for both, some will bridge the gap in finance and complete the purchase for you if your selling is delayed.

Best to do the simultaneous completion for your sale and purchase. It should be ok.

Richard_Webster

Your solicitor will not be able to proceed with your new mortgage if you have not discharged your old mortgage by selling your flat so basiucally forget about the scenario of completing your purchase wihthout completing your sale at the same tiemn or before it.

TolsBols

Thanks for everyone's replies. Just to close out this thread, we decided to change solicitors... not just to avoid the charges incurred through performing financial checks on my in-laws gifting money to my wife, but also because our original choice was the same firm as the vendor. The new solicitor's fees were a little more, but they did not impose those additional charges – we made a £50 saving, not much but better than nothing.

Our new firm still asked my in-laws to provide evidence of the gift money and I am gambling on my flat being sold in time to fund the purchase of our house. My buyer's solicitor should be completing searches on my flat this week and after that, hopefully it's not too long a road to exchange and completion.