cheque issued, what are the interest implications?

Hi all,

heres my problem.

We are FTB's, the cheque was issued to my solicitor last week pending closing of our purchase.

the vendors havent furnished us with one item required for closing, they have failed to meet the agreed closing date. this has now been pushed back by 1 and 1/2 weeks.

we will now have to pay 1 and 1/2 weeks of interest extra but dont yet own the house.

will a lender back date the interest payments to commence only from the new closing date if i request it (EBS)? Solicitor has assured me that they have not yet processed the cheque but I then found out that EBS charge interest from date of issue of cheque and not from date of processing of cheque.

As you can appreciate, every cent counts for house buying and in this case it could ammount to a tidy sum on top of the initial mortgage repayment.

thanks for all your help guys.

If your lender has issued a cheque and your Solicitor has NOT cashed it / paid it into their account you will not accrue any interest.

shilling said:

If your lender has issued a cheque and your Solicitor has NOT cashed it / paid it into their account you will not accrue any interest.

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I was told by my broker though that EBS charge insterest from the day the cheque is issued??? That the above is an issue for my solicitor and mortgage lender (again, EBS).

"If your lender has issued a cheque and your Solicitor has NOT cashed it / paid it into their account you will not accrue any interest."

Not true. Some lenders charge interest from the date the cheque issues not the date the cheque is cashed.

For OP, you need to get a realistic closing date from your vendors. If it going to be several weeks from now, then the loan cheque should be returned to the lender. If its going to be a few days then there really is no point returning the cheque and then waiting for it again.

mf

EBS don't usually charge interest until the cheque is cashed.

i work for a mortgage lender and the solicitor is given 2-3 working days to cash to cheque, with cheque a letter is sent stating to return the cheque if not cashed and the re request the funds which solicitors do not like to do, the lender will charge interest to you the client 2 days as cheque sent becuase they buy the money themselves and been charged accordingly

get your solictior to return the cheque then the bank wil have to credit you back to the interest, they just persume the closing has gone ahead
today before you close get your solicitor to re request the funds and close

best of luck

I checked with EBS when I was in the same situation and they will only charge interest from the day the cheque is cashed. Some other lenders charge interest from the date is it issued, not so with EBS. You will not have to pay any interest once your solicitor has not lodged the cheque into his client account. Some solicitors will do this a few days in advance of closing to ensure the cheque has cleared before they write a cheque to the Vendor's solicitors. Just ask your solicitor to hold off lodging the cheque until nearer the closing date.

spoke with solicitor yesterday, apparently he lodged the cheque (EbS dont charge interest until the cheque is processed) so now im paying interest. He said he did it the day before we were originally due to sign so that he would be able to get a draft for the money from his client account. He said we will see what sort of an arangement i can do for you when it comes to settling the bill with him as a form of compensation. yet again, we get shafted.

Your solicitor lodged the cheque the day before you were due to close in order to be able to pay out a draft for you. They are not the ones holding up the closing. If they hadn't done this they wouldn't be able to pay out the money on your behalf. In fact, most solicitors are forced to lodge the funds 3 to 5 working days before the money is needed to close since this is the amount of time it takes for the funds to clear into the client account. Closing dates are an inexact science- even where both parties are completely in agreement on the date- quite often something happens to hold it up. I'm amazed your solicitor is talking about compensating you since I cannot see what they have done wrong.

Vanilla said:

I'm amazed your solicitor is talking about compensating you since I cannot see what they have done wrong.

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NO!!! You misunderstand me, im not saying the "solicitor" has shafted me, looking back on my post i realise thats what it reads as, i just meant that over the course of this house purchase a number of things have meant us losing out or "getting shafted" the main one being the delay on the vendors side with getting documents back, saying they werent aware of the closing date (even though their solicitor chose it), not moving their stuff out of the house further delaying the closing, their solicitor not returning calls and being unavailable for my solicitor to talk to, house insurance now in place yet we still dont own the property a week and a half later, etc...

i appreciate that he lodged the cheque in my interest, tbh i was surprised that he offered to possibly compensate us, if he doesnt i wont be shocked but he is my familys solicitor and personally he has done a great job, always available or makes time to talk. I was just trying to find out intially of i had to pay interest, thus the reason for this thread, now ive found out the circumstance of how and when you must pay interest...

Lender: some make you pay from date cheque is issued, some make you pay from day cheque is lodged.

Solicitor: can lodge the cheque in their client account which results in cheque going to a status of "processed" or can hold it for a couple of days, but its inadvisable to hold it for longer than necessary.

thanks