How long can solicitors hold mortgage funds?

BertieN

This is the situation - mortgage offer is expiring a grand total of 2 weeks prior to completion. I've obviously requested an extension but long story short it's taking forever and I can't assume it will be successful.

The only other option I have is to ask the solicitors to draw down and keep the funds until completion. The obvious downside, of course, is the fact that I'll have to pay interest for the time funds are held.

What I'd like to know is whether it is actually an option, ie is it legal, however unusual?

es5595

It’s not possible because the mortgage company won’t release the funds if they have no collateral, ie, you haven’t actually purchased the house with those funds. 

Thrugelmir

BertieN said:

The only other option I have is to ask the solicitors to draw down and keep the funds until completion. The obvious downside, of course, is the fact that I'll have to pay interest for the time funds are held.

What I'd like to know is whether it is actually an option, ie is it legal, however unusual?

Not your choice unfortunately. Your solicitor also works for the lender. 

davidmcn

es5595 said:

It’s not possible because the mortgage company won’t release the funds if they have no collateral, ie, you haven’t actually purchased the house with those funds. 

The house doesn't get purchased if the solicitors haven't been given the money. So in practice the funds always have to be released to the solicitors in advance of completion. But the lenders won't want their money sitting around unsecured for too long, and two weeks is certainly too long, so the OP's plan isn't going to work.

In fact, here are the specific answers to "how long after the intended completion date can the solicitors hold on to the loan funds" for all the lenders who use the UK Lender Handbook:

https://lendershandbook.ukfinance.org.uk/lenders-handbook/englandandwales/question-list/1979/

So at most a week, generally less - and that's assuming the lender accepts the principle of completion happening after expiry of the mortgage offer, which I would be doubtful about.

BertieN

Seems to have been quite a stupid proposition. Thanks for the responses. I'll slowly walk away. 🙄