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    • Saikred
    • By Saikred 14th Mar 17, 10:17 AM
    • 6Posts
    • 1Thanks
    Mortgage Chain Confusion - Help
    • #1
    • 14th Mar 17, 10:17 AM
    Mortgage Chain Confusion - Help 14th Mar 17 at 10:17 AM
    Apologies if this isn't the correct forum but we're tearing our hair out stressing over this.

    So here's our situation. We are selling our current property, and buying a new one.
    Our buyer has paid his deposit and tells us he's exchanged for the sale, and we're waiting to exchange contracts for the purchase (any day now) and have asked our solicitor when we need to pay our deposit (12,100)

    Now here's the problem, they are telling us we don't need to pay because the vendor has accepted "the smaller" deposit?
    Now googling this, it seems that the 3000 deposit our buyer has paid moves up the chain... which KIND of makes sense, and at some point we'll be asked for the rest of our deposit.

    Our issue with that is, we're only selling for what we have left on the mortgage, meaning that if his 3k isn't coming off our mortgage we're going to be left with a shortfall there? Why would we have to split the deposit (which we already have in cash) between "the rest of the deposit on top of what our buyer has paid" and "what's outstanding on our old mortgage because his deposit didn't go to the mortgage"?

    Can anyone walk me through this process in laymens terms? Are we concerned over nothing? it just doesn't make sense to me.

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    • kingstreet
    • By kingstreet 14th Mar 17, 10:44 AM
    • 33,185 Posts
    • 17,923 Thanks
    • #2
    • 14th Mar 17, 10:44 AM
    • #2
    • 14th Mar 17, 10:44 AM
    In a chain, the cash deposit passes up the chain becoming a smaller percentage of the usually higher purchase prices as it does so.

    That is to enable you to exchange contracts.

    If you intend to inject cash into the process for your purchase, you would pay that to your solicitor ahead of completion.
    I am a mortgage broker. You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice. Please do not send PMs asking for one-to-one-advice, or representation.
    • Saikred
    • By Saikred 14th Mar 17, 11:09 AM
    • 6 Posts
    • 1 Thanks
    • #3
    • 14th Mar 17, 11:09 AM
    • #3
    • 14th Mar 17, 11:09 AM
    Right ok I think I've got my head around it now after a lot more searching.

    Thanks for your response though.
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