Completion statement issued after completion - £20k+ owed

1122abc

My solicitor issued me with a completion statement after completion, showing a large balance which I did not expect. The issue stems from a mortgage which was less than the agreed amount applied for. My mortgage advisor says it was a responsibility of the solicitor to identify the shortfall. I am aware that I should’ve double checked everything myself, but I naively left it in the hands of the professionals. 

Was it the responsibility of the solicitor to let me know that I had such a large balance, at least just to give me a heads up before completion? I don’t have such funds and if I’d known before completion, I would’ve tried to rectify it by borrowing a larger mortgage. 

Mark_d

So the mortgage company revised the amount they'd lend you, based on their valuation? Did you have no communication with the bank/mortgage broker to advise you of this?  I don't think it's too unusual that the new mortgage doesn't cover the cost of your house, so not sure why the solicitor would flag it to you.  This is your responsibility.

The solicitor is responsible for checking the details of what you're purchasing, checking the searches etc.   Their concern is not your financial wellbeing.

user1977

How was the transaction funded if it has in fact completed? I don't expect the solicitor has dipped into their own overdraft by £20k...

EssexHebridean

The key thing here is that the completion statement wasn't sent to you before completion, in my view...has your solicitor given any reason why they didn't issue it to you before completion so you knew where you stood financially? How did you know what money was required to be sent to cover fees, SDLT etc? 

That said, it would also be surprising that neither your solicitor, broker nor even the mortgage company themselves contacted you to tell you about a lowered amount of lending due to a down-valuation - are you certain that this information wasn't provided to you in any of the documents you were sent during the transaction? 

1122abc

user1977 said:

How was the transaction funded if it has in fact completed? I don't expect the solicitor has dipped into their own overdraft by £20k...

I have no idea. We have completed and £20k+ is due.

Isthisforreal99

Surely you know how much the final mortgage offer was for vs the purchase price?

1122abc

EssexHebridean said:

The key thing here is that the completion statement wasn't sent to you before completion, in my view...has your solicitor given any reason why they didn't issue it to you before completion so you knew where you stood financially? How did you know what money was required to be sent to cover fees, SDLT etc? 

That said, it would also be surprising that neither your solicitor, broker nor even the mortgage company themselves contacted you to tell you about a lowered amount of lending due to a down-valuation - are you certain that this information wasn't provided to you in any of the documents you were sent during the transaction? 

This is a major reason for my post. Reading online, it looks like a completion statement should be given before completion. No reason has been given as I’ve only just realised that this is unusual.

The mortgage amount wasn’t lowered. We initially wanted to apply for a certain amount, and then our deposit dropped so we needed to borrow £20k+ more. It was agreed that this would be applied for however the agreed amount was not applied for and we’ve been told that this was an error with the lender system and nothing can be done now. No one told us about this - that the application went in for a lowered mortgage than discussed. We have been told that it was our responsibility to identify this, which I completely agree with, but there must be some small responsibility to let your client know?

1122abc

Mark_d said:

So the mortgage company revised the amount they'd lend you, based on their valuation? Did you have no communication with the bank/mortgage broker to advise you of this?  I don't think it's too unusual that the new mortgage doesn't cover the cost of your house, so not sure why the solicitor would flag it to you.  This is your responsibility.

The solicitor is responsible for checking the details of what you're purchasing, checking the searches etc.   Their concern is not your financial wellbeing.

I am not asking whether my broker or solicitor should have enquired about my financial wellbeing.

Albermarle

1122abc said:

user1977 said:

How was the transaction funded if it has in fact completed? I don't expect the solicitor has dipped into their own overdraft by £20k...

I have no idea. We have completed and £20k+ is due.

Normally a solicitor would not go ahead with completion, until the funds they have received from you and the mortgage provider, cover the cost of the property and all other outstanding fees, including their own.
Occasionally post completion there might be a small discrepancy to tidy up, but nothing like this.
What happens if you do not/can not pay? You already own the house.
There is more to this than meets the eye, maybe the solicitor has made a mistake at some point. You really need to speak to them urgently about what is going on .

user1977

Are you certain they are actually asking you to pay a £20k shortfall and not that you've misinterpreted what they've sent you in some way? What have they said to you?

1122abc

Albermarle said:

1122abc said:

user1977 said:

How was the transaction funded if it has in fact completed? I don't expect the solicitor has dipped into their own overdraft by £20k...

I have no idea. We have completed and £20k+ is due.

Normally a solicitor would not go ahead with completion, until the funds they have received from you and the mortgage provider, cover the cost of the property and all other outstanding fees, including their own.
Occasionally post completion there might be a small discrepancy to tidy up, but nothing like this.
What happens if you do not/can not pay? You already own the house.
There is more to this than meets the eye, maybe the solicitor has made a mistake at some point. You really need to speak to them urgently about what is going on .

Completion went ahead with the mortgage funds and a deposit (£20k) we paid on exchange around 2 weeks ago. We were told that this is all that is due. 

Moments after completion we were sent the statement and we called by the solicitor asking to pay the balance. 

We have spoken to them, but nothing has been said to suggest this is not standard practice. Only today when thinking about it and reading online, I’ve realised that the statement should have been given before. It’s not easy to cough up £20k+. 

Further context about the mortgage (copied from another post)

The mortgage amount wasn’t lowered. We initially wanted to apply for a certain amount, and then our deposit dropped so we needed to borrow £20k+ more. It was agreed that this would be applied for however the agreed amount was not applied for and we’ve been told that this was an error with the lender system and nothing can be done now. No one told us about this - that the application went in for a lowered mortgage than discussed. We have been told that it was our responsibility to identify this, which I completely agree with, but there must be some small responsibility to let your client know?