• Exchange Of Contracts - Deposit Required

    By Guest on 27th Dec 2018

    I am hoping you could categorically clarify part of the selling/buying process, as this being my first time selling and buying at the same time, I am confused/concerned as to what is required in reality.

    To clarify, we have about £21k in equity on our current property, and about the same in savings. I also have some loans and credit card bills, that if I could pay off, would give us a better mortgage offer.

    My confusion is about the 10% deposit required at exchange of contracts. Can this be made up of my buyers deposit, my equity, and some savings if required, leaving me free to use some of the savings to clear loans? Or do I need the 10% deposit, in cash/savings, sat in my bank account to transfer at exchange of contracts?

    My apologies if this seems a silly question, but being able to clear some loans by using some of the savings would make a considerable difference to our buying options.

    Many thanks in advance for any assistance you could provide.

  • 2 Answers

    By Guest on 28/12/2018

    You will need 10% deposit to actually pay over to the sellers solicitors on exchange of contracts so you couldn’t use the equity as that would not be released until you complete and sell your existing house or remortgage your existing house to release some of that equity.

    Sometimes a lower deposit can be paid on exchange of contracts especially if the property you are purchasing is relatively expensive so they (the sellers) may accept 5% with the remaining funds paid on completion.

  • By Guest on 28/12/2018

    It can be made up of your buyer's deposit and usually the seller will accept a lower than 10% deposit if you have a related sale releasing a lower deposit (although this is at the seller's discretion). The balance of the 10% deposit (if required) would need to come from your cash/savings.

    www.notaryexpress.co.uk for further advice

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