Would a mortgage lender have an issue with me paying my solicitor fees after completion

M47

Hello 

so I’m in the process of purchasing a property from a family member.

My family member is gifting me the deposit in the form of equity.

my family member was going to gift me, my stamp duty and my legal costs out of funds they receive from the sale.

 I was originally misled and told that I could pay the stamp duty after completion but soon realised that it had to be paid upfront.

 I just about managed to scrape my stamp duty together.


my solicitor originally said that he would receive the funds upon completion, however he has changed his tune at the last minute and is demanding funds up front.

part of his reasoning is that he feels that he would need to disclose the fact, to the lender that the seller (my family member) would be gifting me my solicitor fees. Please bear in mind that this is my personal solicitor and is not representing the lender.

can I please have your opinion as to whether the lender is likely to have any issues with my family member gifting me the legal fees after completing, out of the funds they receive from the sale?

DE_612183

I guess they could have - what you are saying is that your mortgage will cover the cost of the property PLUS the solicitors fees.

If the price of the property was reduced to cover the fees and you paid this yourself - would you still be able to afford the property?

user1977

If he's not acting for your lender then I presume a different solicitor is? (you didn't mention that in your previous threads).

In which case I'm not sure why your own solicitor would be disclosing anything to your lender - they only need to answer enquiries from the lender's solicitor.

Tiglet2

It's quite normal for a solicitor to expect to receive all monies in time for completion.  They are not in the habit of trusting clients to pay them afterwards as not all clients can be reliable and honest.

Is your solicitor not also acting on behalf of the lender?  The lender will appoint a solicitor to act for them and it usually is the same one acting on behalf of the client, unless the solicitor is not on the lender's panel.

I don't suppose your lender cares when you pay your legal fees, but the solicitor most certainly will care and will advise the lender not to lend until all monies are paid prior to completion.

Sorry, but you are obviously in a great position in being gifted monies to enable you to purchase a property, but you do need to understand how it works and that you have to have enough monies yourself to pay upfront all the fees and disbursements, even if you are likely to be reimbursed afterwards by your family member.

eddddy

Tiglet2 said:

I don't suppose your lender cares when you pay your legal fees...

I think the aspect the lender will care about is that the OP seems to be planning to get an incentive / cashback from the seller (i.e. the seller pays their legal fees).

During the mortgage application, the OP would have been asked about incentives from the seller - and presumably didn't mention "the seller will pay my legal fees".

If they had mentioned it, it would have been treated as a discount on the purchase price, and so reduced the max amount the lender would lend.




Therefore, you could say that the OP's plan is getting dangerously close to mortgage fraud.

If the OP has described their plan to their solicitor, even if the OP's solicitor isn't representing the lender - I guess they might want to avoid being in the position of facilitating possible fraud, by accepting their fees late.

sheramber

The money from your lender will go to your relative, not to your solicitor. Your solicitor will not be prepared to take the risk of not being paid so wants the money paid in advance. Seems reasonable to
me. 

EssexHebridean

The money from the mortgage lender will go to the OP's solicitor - and they will then forward it on to the relative's solicitor for completion. 

But yes - entirely reasonable for the solicitor to expect payment on completion for their fees. I'd be very surprised if they didn't want that, in fact! 

sheramber

Why would it go to OP's solicitor if that solicitor is not acting for the lender?