Proof of deposit

Locornwall

We would like to buy a new build and have accepted an offer on our house. We are trying to get money together for the deposit. Part of the deposit may have to wait until mid August, which will be after exchange, but a week or two before completion? Any issues with this when it comes to proof of deposit? Does the lender or solicitor need to know proof for every last penny?

[Deleted User]

You won't be able to exchange without every penny of deposit plus legal costs accounted for

Soot2006

You'll need the money for exchange. mid-August is in 6 weeks so you can plan exchange for after then? It'll likely take that long for the sale/purchase stuff anyway. If you can demonstrate where the deposit is coming from and there is confidence that it WILL be in place mid-August, then no reason not to start the process but be open with everyone involved!

Locornwall

Would it be viable to tell them I’m expecting next months pay, which will make up the difference? Albeit it will only be an additional £2000 to add.

csgohan4

lenders discretion, every lender is different, generally mortgage offers require evidence of deposit, it seems you offered prematurely with not even having enough for the deposit as yet.

Have you got enough saved for solicitors fees, stamp duty e.t.c?

Locornwall

Yes I’ve got enough for that.

I haven’t put a confirmed offer in yet. I’ve only run the figures with a mortgage broker. I just know what I’ve got and got coming.

csgohan4

how long is your offer with the builders valid for ? some require exchange in 28 days, i would be upfront with them, or risk losing the house

Locornwall

We have t put a formal offer in yet, but they have hinted what might be accepted. The house hasn’t finished and hasn’t been released, although seems like it will within the next 4-6 weeks,

Abigail1990

Sorry, I can't seem to quote but someone earlier on in the thread said that you can't exchange without deposit and legal fees accounted for ? We have transferred our deposit into a joint savings account which are the bank statements we provided to solicitors for proof of deposit. Legal fees etc we have kept in our current accounts (interest rate on savings account is really bad anyway and just didn't occur to us to move them over too) but we have not given the solicitors those statements. Solicitors are still doing checks etc (I have paid £350 upfront for their search fees), but am I right in thinking they won't let us exchange until I show them that we have their fees in our current accounts (or transfer it to our savings and send them an updated statement?)

I know they'll probably ask if they need it but if I can pre empt this and save time I would like to. Likewise I don't want to send them unnecessary paperwork they don't need as I dont want anything lengthening the process.

Am I overthinking this?

Thanks in advance for any advice, if i should have started a new thread for this I apologise.

silvercar

The word "deposit" can have many meanings in this context.

At the point of exchange you pay the deposit of 10% of the purchase price, or lower if pre-agreed, it isn't uncommon for everyone to agree a 5% deposit.

There is also the difference between the purchase price and the mortgage offer, that some people also call the deposit. This can be any percentage of the purchase.

If you don't have the 10% deposit (or agreed lower figure) ready on exchange you have a problem. The remaining money will need to be with your solicitor a couple of days before completion, though solicitors will obviously want to be confident it is coming.

Locornwall

Thanks silvercar, are you a mortgage advisor/broker?

Surely it’s one thing to suggest you’ll have for example £10,000 pay next month, even though you e averaged £3500 for sometime. Although saying I’m expecting £3500 next month and I intend on using £1000 of that towards my purchase price is reasonable given the completion would be a week or two after that?