Proof of funds

ironlady2022

Hi

I've saved up the stamp duty, legal fees etc, will my Sol be asking for my proof of funds before exchange and completion please?

Thanks

pinkteapot

ironlady2022 said:

Hi

I've saved up the stamp duty, legal fees etc, will my Sol be asking for my proof of funds before exchange and completion please?

Thanks

They usually ask for proof of funds (where the money has come from to check for money laundering) for any cash going into the purchase: the deposit in terms of purchase price minus mortgage (as opposed to just the 10%-on-exchange deposit). 

I've not known them care where the money to pay the fees has come from! 

For the solicitor, "proof of funds" is about checking the money was acquired legally, rather than proving you have the means to pay their bill. If it's simply a case of having saved up money gradually, periodic bank statements showing the balance growing should suffice - but your solicitor can tell you what they need.

Last time we bought, we'd sold up and rented beforehand, which meant all the equity from our previous house was sat in the bank. For that, we provided paperwork relating to the sale of the last property to show how we'd suddenly acquired such a large savings balance. 

ironlady2022

pinkteapot said:

ironlady2022 said:

Hi

I've saved up the stamp duty, legal fees etc, will my Sol be asking for my proof of funds before exchange and completion please?

Thanks

They usually ask for proof of funds (where the money has come from to check for money laundering) for any cash going into the purchase: the deposit in terms of purchase price minus mortgage (as opposed to just the 10%-on-exchange deposit). 

I've not known them care where the money to pay the fees has come from! 

For the solicitor, "proof of funds" is about checking the money was acquired legally, rather than proving you have the means to pay their bill. 

Thank you. Most of it will be from sale of my house and a small amount from my savings, so that's fine

Is the stamp duty to Sol paid upon completion or after? 

pinkteapot

ironlady2022 said:

pinkteapot said:

ironlady2022 said:

Hi

I've saved up the stamp duty, legal fees etc, will my Sol be asking for my proof of funds before exchange and completion please?

Thanks

They usually ask for proof of funds (where the money has come from to check for money laundering) for any cash going into the purchase: the deposit in terms of purchase price minus mortgage (as opposed to just the 10%-on-exchange deposit). 

I've not known them care where the money to pay the fees has come from! 

For the solicitor, "proof of funds" is about checking the money was acquired legally, rather than proving you have the means to pay their bill. 

Thank you. Most of it will be from sale of my house and a small amount from my savings, so that's fine

Is the stamp duty to Sol paid upon completion or after? 

You'll make one single pre-completion payment to the solicitor, to cover any cash you're putting into the house above what was paid on exchange, plus stamp duty, plus EA fees if you're selling, plus the solicitor fee. They'll send you a 'completion statement' listing everything out, and you pay them the amount shown before completion. 

For example: 

You sell a house for £150k which has £60k owing on its mortgage and £90k equity. 
You're buying a house for £300k, using the £90k equity plus £40k from savings plus a £170k mortgage. You've already paid £30k on exchange of contracts. 
Stamp duty is £2,500
Your EA bill for selling the first house is £1,500
Your solicitors fees are £1,000 

Completion statement: 
£150k comes from your buyers, £60k pays off the first mortgage, £90k goes towards the next purchase 
£300k purchase less deposit already paid = £270k. £170k from mortgage company, £90k from sale, need £10k from you.
+ £2,500 stamp duty + £1,500 EA + £1,000 for solicitor
= £15,000 please. 

The solicitor then pays the stamp duty to HMRC, and the EA fees to the EA. 

The bill is paid just before completion. The solicitor won't be able to complete unless you've paid, but you can pay it just a day or two before (use a payment method guaranteed to get there!). You can pay it a bit earlier for peace of mind if you prefer. 

The above assumes exchange took place a little while before completion, and the completion statement is produced afterwards. 

ironlady2022

pinkteapot said:

ironlady2022 said:

pinkteapot said:

ironlady2022 said:

Hi

I've saved up the stamp duty, legal fees etc, will my Sol be asking for my proof of funds before exchange and completion please?

Thanks

They usually ask for proof of funds (where the money has come from to check for money laundering) for any cash going into the purchase: the deposit in terms of purchase price minus mortgage (as opposed to just the 10%-on-exchange deposit). 

I've not known them care where the money to pay the fees has come from! 

For the solicitor, "proof of funds" is about checking the money was acquired legally, rather than proving you have the means to pay their bill. 

Thank you. Most of it will be from sale of my house and a small amount from my savings, so that's fine

Is the stamp duty to Sol paid upon completion or after? 

You'll make one single pre-completion payment to the solicitor, to cover any cash you're putting into the house above what was paid on exchange, plus stamp duty, plus EA fees if you're selling, plus the solicitor fee. They'll send you a 'completion statement' listing everything out, and you pay them the amount shown before completion. 

For example: 

You sell a house for £150k which has £60k owing on its mortgage and £90k equity. 
You're buying a house for £300k, using the £90k equity plus £40k from savings plus a £170k mortgage. You've already paid £30k on exchange of contracts. 
Stamp duty is £2,500
Your EA bill for selling the first house is £1,500
Your solicitors fees are £1,000 

Completion statement: 
£150k comes from your buyers, £60k pays off the first mortgage, £90k goes towards the next purchase 
£300k purchase less deposit already paid = £270k. £170k from mortgage company, £90k from sale, need £10k from you.
+ £2,500 stamp duty + £1,500 EA + £1,000 for solicitor
= £15,000 please. 

The solicitor then pays the stamp duty to HMRC, and the EA fees to the EA. 

Thank you very much for your concise reply. 

pinkteapot

It's early on a Sunday - someone will correct me if my maths has gone wonky.  But you get the general idea of the process.