Confused about 100% mortgage and 10% term loan

D

Dualtha

Registered User
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30
Hi,

I got a 100% mortgage from PTSB and 2 weeks past they gave me a term loan for the 10% deposit. Interest will have to be paid on this. The solicitor then requested the cheque but the cheque issue drew down the whole 100% mortgage. What I am confused about now is why did I need the 10% term loan when this wasn't drawn down alone but as part of the 100%?
I am waiting on the bank to get back to me but surely I shouldn't be caught for the interest on the term loan? The vendors still haven't signed the contract so t shouldn't have been drawn down yet anyways....
Any advise on this?
 
Sounds like either PTSB or your solicitor made a mistake. The 100% will be returned to PTSB and you shouldn't be changed any interest but make sure you get this confirmed in writing from PTSB or an undertaking from your solicitor to pay it (if was his/her fault).

Sarah

www.rea.ie
 
Dualtha said:
Hi,

I got a 100% mortgage from PTSB and 2 weeks past they gave me a term loan for the 10% deposit. Interest will have to be paid on this. The solicitor then requested the cheque but the cheque issue drew down the whole 100% mortgage. What I am confused about now is why did I need the 10% term loan when this wasn't drawn down alone but as part of the 100%?
I am waiting on the bank to get back to me but surely I shouldn't be caught for the interest on the term loan? The vendors still haven't signed the contract so t shouldn't have been drawn down yet anyways....
Any advise on this?
Click to expand...

the 10% should be paid when the contacts where signed. The 100% shouldn't be sent yet.
 
Judging by this Indo article (free registration required) Dualtha's experience is to be expected with 100% mortgages and not indicative of any error on the part of the lender or solicitor:
[font=Verdana, Arial] ALL of the lenders offering 100pc mortgages have followed Bank of Ireland's lead in advancing the 10pc contract deposit that borrowers must put down before their mortgage comes through.

...
[/font][font=Verdana, Arial]
Primafinance's Mr O'Sullivan said 100pc mortgage applicants must make it clear if they also want the 10pc contract deposit advanced.

"Legally, the way it works is that the lender gives 100pc to the solicitor, and the solicitor undertakes to return the 10pc deposit loan plus interest.

"The borrower will have to have advanced the solicitor at least enough to cover the loan," he said.
Click to expand...


[/font]
 
"You won't get your full mortgage until your solicitor requests it, and the solicitor won't request it until the seller has provided the necessary documents and is ready to vacate," Mr O'Sullivan said. "
Click to expand...


The sellers have not signed the contracts as yet, no date to vacate has been set in stone and our solicitor still drew down the full amount, is this not strange?
 
Last edited by a moderator:
Had to go through the same thing.
The way it was explained to me was that the mortgage couldn't be drawn until the contract had been signed and the contract couldn't be signed without the deposit of 15% of which PTSB would only give 10% (i.e. 2/3s) and I had to come up with the other 5% myself.
My main regret was getting a term loan with PTSB for 9.5% interest when I could have shopped around and got it for 6%.
 
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