Your browser isn't supported
It looks like you're using an old web browser. To get the most out of the site and to ensure guides display correctly, we suggest upgrading your browser now. Download the latest:

Welcome to the MSE Forums

We're home to a fantastic community of MoneySavers but anyone can post. Please exercise caution & report spam, illegal, offensive or libellous posts/messages: click "report" or email forumteam@.

Search
  • FIRST POST
    • Amanda_Cm
    • By Amanda_Cm 12th Mar 18, 3:01 PM
    • 166Posts
    • 200Thanks
    Amanda_Cm
    Interest on lenders money kept by solicitors?
    • #1
    • 12th Mar 18, 3:01 PM
    Interest on lenders money kept by solicitors? 12th Mar 18 at 3:01 PM
    Completion date 12th of March so today but not possible due to hold up further in the chain. They are waiting on redemption certificate tomorrow.
    The funds from our lender were requested last week and now our solicitor is calling me to say that they will keep the money for few days but if the transaction is not possible, we still have to pay interest to the lender.
    I don't understand what that means. We are already in debt before even get the house?
    We didn't even exchange yet.
    What if the chain collapse? We still need to pay interest?
Page 1
    • stator
    • By stator 12th Mar 18, 3:04 PM
    • 6,241 Posts
    • 4,123 Thanks
    stator
    • #2
    • 12th Mar 18, 3:04 PM
    • #2
    • 12th Mar 18, 3:04 PM
    The mortgage agreement you signed probably says that interest starts on the date the funds are drawn down.

    If the deal collapses and the money is returned I doubt they will bother asking you for interest. But they could do, if it's in the mortgage agreement T&C
    Changing the world, one sarcastic comment at a time.
    • davidmcn
    • By davidmcn 12th Mar 18, 3:09 PM
    • 7,691 Posts
    • 7,838 Thanks
    davidmcn
    • #3
    • 12th Mar 18, 3:09 PM
    • #3
    • 12th Mar 18, 3:09 PM
    now our solicitor is calling me to say that they will keep the money for few days but if the transaction is not possible, we still have to pay interest to the lender.
    I don't understand what that means. We are already in debt before even get the house?
    We didn't even exchange yet.
    What if the chain collapse? We still need to pay interest?
    Originally posted by Amanda_Cm
    Why don't you ask these questions of your solicitor when they call you?
    • Amanda_Cm
    • By Amanda_Cm 12th Mar 18, 3:11 PM
    • 166 Posts
    • 200 Thanks
    Amanda_Cm
    • #4
    • 12th Mar 18, 3:11 PM
    • #4
    • 12th Mar 18, 3:11 PM
    I just didn't think of it when she called and I can't reach her now.
    Thank you, stator. I am going to read the t&c now.
    • TBagpuss
    • By TBagpuss 12th Mar 18, 3:48 PM
    • 6,487 Posts
    • 8,418 Thanks
    TBagpuss
    • #5
    • 12th Mar 18, 3:48 PM
    • #5
    • 12th Mar 18, 3:48 PM
    Stator is right, the T&Cs will almost certainly say that interest is payable from the time the mortgage company sends the money to your solicitors. if there is much delay then the solicitors will probably return the funds to the lender, but as they normally have to give a few days notice to get the funds, of the delay is only going to be a few days it makes better sense for them to keep hold of the funds.
    • Cheeky_Monkey
    • By Cheeky_Monkey 12th Mar 18, 4:18 PM
    • 1,659 Posts
    • 3,417 Thanks
    Cheeky_Monkey
    • #6
    • 12th Mar 18, 4:18 PM
    • #6
    • 12th Mar 18, 4:18 PM
    So you agreed to a simultaneous exchange/completion for today?

    Very risky when you're in a chain!
    I used to be indecisive - now I'm not so sure
    • Amanda_Cm
    • By Amanda_Cm 12th Mar 18, 4:39 PM
    • 166 Posts
    • 200 Thanks
    Amanda_Cm
    • #7
    • 12th Mar 18, 4:39 PM
    • #7
    • 12th Mar 18, 4:39 PM
    Cheeky Monkey, first time buyer here + foreigner so I am trusting the solicitor but coming here for advice all the time as there is lots of things I don't know and understand.
    Our solicitor tough we can exchange last week but she wasn't informed about the problem in the chain. After all vendor's solicitor has agreed the Completion date.
    All this process is slow and messy. Don't want to move house at least 10 years after this.
    • eddddy
    • By eddddy 12th Mar 18, 5:12 PM
    • 6,349 Posts
    • 6,224 Thanks
    eddddy
    • #8
    • 12th Mar 18, 5:12 PM
    • #8
    • 12th Mar 18, 5:12 PM
    Cheeky Monkey, first time buyer here + foreigner so I am trusting the solicitor but coming here for advice all the time as there is lots of things I don't know and understand.
    Our solicitor tough we can exchange last week but she wasn't informed about the problem in the chain. After all vendor's solicitor has agreed the Completion date.
    All this process is slow and messy. Don't want to move house at least 10 years after this.
    Originally posted by Amanda_Cm

    Most people don't exchange contracts and complete on the same day - because of the uncertainty of if/when it will happen.

    It's more usual to exchange contracts and then complete 2 or 4 weeks later.

    The solicitor will then know in advance exactly when the mortgage money is required. (And all the buyers/sellers have 2 or 4 weeks to get ready for the move.)
    • Amanda_Cm
    • By Amanda_Cm 12th Mar 18, 5:16 PM
    • 166 Posts
    • 200 Thanks
    Amanda_Cm
    • #9
    • 12th Mar 18, 5:16 PM
    • #9
    • 12th Mar 18, 5:16 PM
    Thank you, eddddy. You are always helpful. I noticed people are exchanging and completing after 1-2-3 weeks but I trusted the solicitor and ... well that's the result.
    • AnotherJoe
    • By AnotherJoe 12th Mar 18, 5:19 PM
    • 9,449 Posts
    • 10,452 Thanks
    AnotherJoe
    To be fair to the OP it looks as if exchange was set for last week, completion today, but exchange got delayed and they stuck with today as completion.
    • AdrianC
    • By AdrianC 12th Mar 18, 5:23 PM
    • 17,395 Posts
    • 15,762 Thanks
    AdrianC
    Your lender has handed you the money. Of course you pay interest on it from the moment it's handed over. Why wouldn't you?

    Your solicitor is currently looking after it. It is earning no interest in their client account. If completion was delayed substantially, it would be sent back to the lender - and the interest clock stopped. But, for a delay of a few working days, that will cause more problems than it solves.

    Just pause and have a think about how much money's-worth of interest you're getting stressed about here...
    • Flat Eric
    • By Flat Eric 12th Mar 18, 6:27 PM
    • 3,958 Posts
    • 23,877 Thanks
    Flat Eric
    I anticipate your solicitor requested mortgage funds for Friday last week so that they were there ready for completion today.

    You will pay interest to your lender from the day your solicitor receives the funds but as to how exactly this is worked out and how much it will be you will need to speak to your solicitor or to your lender.

    I guess it's a tad frustrating that you are paying interest and you don't have an exchange or completion yet but hopefully this is imminent.

    If completion is delayed as has been here then your solicitor can only keep the mortgage funds for a limited time so I anticipate your solicitor has contacted your lender to get permission to keep the funds for longer so that there is no delays in funds being sent back to your lender and then re-requested by your solicitor.

    As an aside the time between exchange and completion will vary depending on the circumstances. Sometimes exchange and completion happens on the same day sometimes exchange one day completion the next and sometimes there's the traditional week or two week gap between exchange and completion.

    Exchange and completion on the same day can leave everyone a bit more fraught because it can all seem very last-minute and stressful organising removals etc when exchange hasn't yet happened.
    Last edited by Flat Eric; 12-03-2018 at 6:32 PM.

Welcome to our new Forum!

Our aim is to save you money quickly and easily. We hope you like it!

Forum Team Contact us

Live Stats

874Posts Today

6,778Users online

Martin's Twitter
  • It's the start of mini MSE's half term. In order to be the best daddy possible, Im stopping work and going off line? https://t.co/kwjvtd75YU

  • RT @shellsince1982: @MartinSLewis thanx to your email I have just saved myself £222 by taking a SIM only deal for £7.50 a month and keeping?

  • Today's Friday twitter poll: An important question, building on yesterday's important discussions: Which is the best bit of the pizza...

  • Follow Martin