House purchase contract deposit

[limmy80]

Hi,

We're in the process of buying a house, the vendors contract deposit amount is 10% of purchase price. Solicitor informs us we cannot pay a larger deposit than contract amount, even though we could pay more.

So do I pay lump sum to vendor along with mortgage drawdown at closing?

e.g 30k deposit

+ 10k cash + 260k mortgage @ drawdown

 

[Brendan Burgess]

OK, if the deposit is 10%, that is all you should pay.

If you have €10,000 cash, send that you your solicitor and your solicitor will draw down only €260k.

However, it is probably advisable to draw down the full mortgage of €270k even if you have €10,000 you don't need. When you have settled into the house and sorted out any unexpected bills, then you can pay any money you don't need off your mortgage.

If it's a fixed rate mortgage, there might be a small early repayment fee, but I think it is worth it for the comfort of having the spare cash.

Brendan

 

[limmy80]

Thanks Brendan