Bank draft payable to whom on new house purchase

Folks,

I'm about to close on a new house and am supplementing the mortgage cheque with my own funds.

My question is to whom do I make the bank draft payable? I think it's the builder's solicitor but am not sure and my solicitior is offline at the mo.

Many thanks,

N.

I would think that it is to your solicitor. They then contact the vendors solicitor and states that they are "in funds". They then close.

Cheers woods,

Just got an email from solicitor and the balance draft is payable to the builders solicitor.

N.

it should be your own solicitor. (only, they will arrange payment on your behalf, that's what you're paying them for.)

Not in my experiences bambino - we always paid bankers draft directly to the builders solicitor.

You have no legal come back if you do that. If a bank is paying out on a mortgage, they must pay to your solicitor in order to release the solr from undertaking. If you are using your own funds then your solicitor should send the cheque to the builders solr. you don't.

For loans/mortgages involving property purchases the borrower's [the person buying the house] solicitor completes a standard undertaking for the lending bank. This essentially states that upon receipt of funds solicitor will arrange for a legal charge to be put over the property with the bank's name registered on it

The bank should either:

a) Electronically transfer the funds to the borrower's solicitor's clients account.
b) Issue a bank draft payable to the borrower's solicitor.

If the funds are not issued to the solicitor in this way then he/she is not obliged to stand over their undertaking i.e. the bank cannot rely on it.

Upon closing the solicitor will draw a cheque on their clients account and give it to the vendor's solicitor.

"Upon closing the solicitor will draw a cheque on their clients account and give it to the vendor's solicitor."

The solicitor should not do this. All closings should involve payment by way of draft or funds transfer. Transactions do sometimes close with a solicitors cheque, but it is not best practice.

MOB said:

The solicitor should not do this. All closings should involve payment by way of draft or funds transfer. Transactions do sometimes close with a solicitors cheque, but it is not best practice.

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It can be done by mutual agreement.

Yes, draft or funds transfer is more usual but even these will be initiated by the borrower's solicitor i.e. the mortgage/loan monies should still given to him/her initially - not directly to the vendor's solicitor.

bambino said:

You have no legal come back if you do that. If a bank is paying out on a mortgage, they must pay to your solicitor in order to release the solr from undertaking. If you are using your own funds then your solicitor should send the cheque to the builders solr. you don't.

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We always made the draft out to the builder but gave it to our solicitor who used it as part of the transaction. The solicitors undertaking in regards to a mortgage is to the banks funds etc and is different to funds you provide yourself.