Moving Home - Deposit for next purchase?

lewis_hardwick

Hi experts!
Im looking move home and I'm a bit confused about deposits.

As afirst time buyer it was simple, x% deposit paid to the solicitor ready for completion. This deposit as I understand goes to the vendor you buy from?
How about when you're buying 'up'?  I've had look online and cant see mto see how it all works. I'm looking to buy a property about £80-100k more expensive than my current one. Do I need to find the x% completely, or can I use the depoist from my buyer + equity from my current property. My partner is coming onto the mortgage, so they'll be contribuiting too and as we want things equal, there's a strgon chance there'll be £££ coming back to me (for refurbishments).

Just when I thought I'd sussed it all out, yep, I hadn't!

PJBRFC

Deposits get passed up the chain, so your buyers deposit will become your deposit. However you will likely need to top it up as you are buying something more expensive than the house you are selling, unless your vendors agree to accept a deposit lower than 10%. 

SameOldRoundabout

It’s very common for deposits to be agreed as less than 10% if it moves up the chain. Our buyers deposit gives us a 7.7% deposit on our onward purchase, this was no issue as the equity going into the house at completion is way more than the top up amount would be. Just tell your solicitor when you instruct that you are hoping to not pay a cash top up and see what they say (I’m not sure if it’s something to do with equity, if we had less equity going back in than the deposit amount i think we’d have been asked to front the extra). 

p00hsticks

lewis_hardwick said:

As afirst time buyer it was simple, x% deposit paid to the solicitor ready for completion. This deposit as I understand goes to the vendor you buy from?

 The deposit (of whatever amount is mutually agreed between buyer and seller) needs to be in place for exchange, not completion (as its purpose is to act as some sort of security in the rare event that the completion does not go ahead for whatever reason). It's held by the solicitors in the chain.

It may be that as a FTB you exchanged and completed on the same day, so didn't make the distinction, but now you're going to be buying and selling you may find it less stressfull to request a few weeks between the two so that you can be confident the sale is going to be proceed before you arrange removals etc (bearing in mind that until exchange there are no guarantees that the sale will go ahead).

lewis_hardwick

OK, that makes more sense now!

Thank you all!