Deposit when buying a new home

smudge2013

Hello!

I'm selling my home for 200k, and buying a new home for 300k.

I understand that the depoist paid at exchange is 10%, so my buyer will give me 20k, and I will give my seller £30k.

I have 100k equity in my property, the rest of the money will be a mortgage.

Where I'm confused is what happens at completion? Does the bank receive the money from my sale, then bundle that with the money it is lending me, before sending it on to the account of the person I am buying from?

Many thanks,

James

glentoran99

The bank doesn't receive the money from you, The money goes to your conveyancer who does everything

G_M

Are you doing your own conveyancing or using a solicitor? If a solicitor, he pays your seller for you, so
* your cash,
* plus the bank's loan,
* plus the money from your buyer
all goes to him.

He pays your seller 10% at Exchange as you rightly say, and the remaining 90% at Completion.

smudge2013

So the buyer sends the money for my property to my solicitor, they then get the extra money from my bank required to purchase my property, and send the lot to the buyers solicitor?

booksurr

at the point of exchange your buyer pays you his 10% deposit. Your solicitor holds 20k in their client account

at the point you exchange contracts with your vendor, you have to pay your deposit to your vendor. Assuming you have already exchanged with your purchaser, you then have a £10k shortfall against the 30K your vendor is asking for. Either you find that 10k yourself from your own money or you have to ask your vendor if they will accept a lower deposit.

at point of completion your solicitor receives 200 - 20k already paid from your purchaser. Your solicitor pays off whatever is outstanding on the mortgage attached to the property you have now sold and holds the balance in his client account.
The solicitor then has to pay your vendor the 270k still owed (ie 300k - deposit already paid at exchange). That 270k will be made up from whatever mortgage sum you are borrowing, and will be topped up with the balance of the cash in the client account.

smudge2013

Thanks that clarifies it all!