What happens to any interest earned on our deposit?

emeraldbugle

We are exchanging as early as poss to secure our purchase, just wondered what happens to the interest our deposit earns.

MissMoneypenny

Is the solicitor holding the money for you? If so, their rules are in the following link (part C)
http://66.102.9.104/search?q=cache:Y2lulueWzlEJ:lawsociety.org.uk/documents/downloads/Profethics_SAR.pdf+law+england+solicitors+clients+mone*+interest&hl=en&ct=clnk&cd=1&gl=uk&client=firefox-a#19

emeraldbugle

Thanks. Tricky one, we are the bottom of the chain (only 3 parties in the chain), so our 10% gets passed to the vendors solicitor who then passes it to their vendors solictor.

So should we still be entitled to the interest?

IveSeenTheLight

emeraldbugle wrote: »

Thanks. Tricky one, we are the bottom of the chain (only 3 parties in the chain), so our 10% gets passed to the vendors solicitor who then passes it to their vendors solictor.

So should we still be entitled to the interest?

In our experience, any deposit paid to the solicitor accrues interest which is then collated at the time of the money transfer/

Effectively your deposit becomes deposit + interest

RabbitMad

In the past I've had cheques a couple of months after completions for the interest I was owed. Never a huge amount but enough for a take away and some drink.

worrypants

If your solicitor holds your deposit ready for exchange you will be due interest

once excahnge has taken place the deposit is no longer yours and is held in trust for the seller

if your deposit is more than the 10% usuallly required for exchange, then you will be due interest on anything over the 10%
eg property £300000 your deposit £200000 exchange deposit £30000 ( 10%)mortgage £100000 .

you would be due interest on £170000 until completion

if your deposit is just 10% of the purchase price then you would not be due any interest from the day of exchange

emeraldbugle

worrypants wrote: »

If your solicitor holds your deposit ready for exchange you will be due interest

once excahnge has taken place the deposit is no longer yours and is held in trust for the seller

if your deposit is more than the 10% usuallly required for exchange, then you will be due interest on anything over the 10%
eg property £300000 your deposit £200000 exchange deposit £30000 ( 10%)mortgage £100000 .

you would be due interest on £170000 until completion

if your deposit is just 10% of the purchase price then you would not be due any interest from the day of exchange

Thanks that makes sense, as once we have exchanged, it is not my money anymore is it? Thanks :T

Generali

worrypants wrote: »

once excahnge has taken place the deposit is no longer yours and is held in trust for the seller

Isn't the money yours until completion? I think it's held in an Escrow account in the meantime. Not sure if Escrow accts pay interest though.

worrypants

no once exchanged the deposit is held in trust for the seller .

Generali

Interesting.

Doesn't that mean that the house and the cash are both held in the interest of the seller then?

I work in banking (or did until very recently). That sort of thing would be frowned upon.