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fleetingmind
Posts: 480 Forumite
We're due to exchange hopefully on Monday. A friend asked if we had already paid the exchange deposit.
I said no, as the money for the house is 3/4 equity in my current house and the rest is an already agreed mortgage. So no cash deposit.
He said I still needed to pay a exchange deposit in case I pull out after exchange.
Now this is all news to me and 10% of house is over £50k and 10% of mortgage is over £14k. No one has told me about this.
Please help and put my mind at ease! Thank you.
I said no, as the money for the house is 3/4 equity in my current house and the rest is an already agreed mortgage. So no cash deposit.
He said I still needed to pay a exchange deposit in case I pull out after exchange.
Now this is all news to me and 10% of house is over £50k and 10% of mortgage is over £14k. No one has told me about this.
Please help and put my mind at ease! Thank you.
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Comments
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The person buying your current house will be paying a deposit for your house...
... and that deposit will be used by your solicitor as the deposit for the house you are buying.
That may be less than 10% of the price of the house you are buying, but the solicitors have probably agreed that is ok.
So you probably don't have to find any more cash at this stage.0 -
The person buying your current house will be paying a deposit for your house...
... and that deposit will be used by your solicitor as the deposit for the house you are buying.
That may be less than 10% of the price of the house you are buying, but the solicitors have probably agreed that is ok.
So you probably don't have to find any more cash at this stage.
Our buyers are also paying for our house with money from the sale of their house but will be getting a deposit from their buyer. The initial deposit if it gets passed up won't come near the 10% I'd need.0 -
fleetingmind wrote: »Our buyers are also paying for our house with money from the sale of their house but will be getting a deposit from their buyer. The initial deposit if it gets passed up won't come near the 10% I'd need.
Then you need to speak to your solicitor. As they'll need to confirm that your vendor will accept a lower amount than 10%.0 -
I would hope that the solicitors have already sorted this out. There are 2 main options:
1) Your seller has agreed to accept your buyers deposit as your deposit even though it is for less than 10%; or
2) Your solicitor has agreed (for you) to provide a 10% deposit but that the deposit is held to order, essentially meaning that it only gets paid on completion or if the contract is breached.
If they have gone for the second option then they really should have told you as it would potentially make you liable to pay the deposit at a future date. This may of course be in the event of the transaction falling through, in which case you might not have the cash to pay it.0 -
2) Your solicitor has agreed (for you) to provide a 10% deposit but that the deposit is held to order, essentially meaning that it only gets paid on completion or if the contract is breached.
If that was the case the OP would have paid the 10% to the solicitor which they have not done.0 -
On exchange day, the money from the first time buyer or cash buyer at the bottom gets passed up the chain... So on a £100K house lets say 10% (as 10% is usually what solicitors ask for) - 10K... this is usually passed up the chain to the last person who could be buying a 500K house. This is where solicitors have to agree because obviously 10% of 500K is 50K and the 10K wouldn't be enough, it's not a problem, it just has to be agreed by the chain. Other option is to exchange/complete on the same day, this isn't an issue at all then.0
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So finally exchanged yesterday. I spoke to my solicitor and she confirmed what a lot have said on here. She said it passed up the chain and would be in contact if more was needed. Which was a slight shock as we were due to exchange that day and £20k-£30k is not easy to get hold of.
There was no more mention of the exchange deposit after that. So either the other parties weren't fussed or there was enough from the bottom to pass up the chain.
Was surprised you had to have home insurance for the new house on exchange - I thought I'd just need it for day of completion onwards. MoreThan said they couldn't do it as I wasn't the legal owner yet so had to get a policy saying I lived there! Not sure if you can get special insurance but I was in a rush.
Relieved for it to be (almost) over.!Appreciate all of the help.!Thank you.0 -
fleetingmind wrote: »Was surprised you had to have home insurance for the new house on exchange - I thought I'd just need it for day of completion onwards.
From exchange you are committed to buy. Even if the property burns to the ground prior to completion.0
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