Using One Deposit to Pay Another

M

MissRibena

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Hi everyone

Just wondering if it's allowable to use the deposit paid to my solicitor on exchange of contracts on the house I'm seeing to pay the deposit on the house I'm buying? Or does the solicitor have to hang onto all the money from the sale until the transaction is fully completed? Haven't checked with the solicitor yet but I'm seeing him this afternoon.

Rebecca
 
My solicitor told me that this wasn't possible but I'm sure it depends on his or her discretion. Maybe you could ask the sellers of the house you're buying if they will accept a lesser deposit, such as 5% now and pay the remainder when you close the purchase.
 
Thanks Budapest. I have a loan organised for the deposit but just had this brainwave last night. It'd be handier and less expensive.

Thanks
Rebecca
 
It DOESNT depend on the solicitors discretion- they CANNOT release the deposit until completion.
 
Thanks Vanilla. That solves that. I had an inkling myself that that was the case.

Rebecca
 
i recently signed a waiver to allow my deposit to be released immediately to the vendor (a builder). i didnt have a problem with it and dont see why anyone else would have one. at the that stage its a done deal anyway and if the purchaser cannot complete, the vendor keeps the deposit anyway.
 
Yes, but thats completely different- Miss Ribena is selling a second hand house- you are obviously buying a house in the process of being built. In the second scenario, you may allow your deposit to be released, but you either have Homebond or other insurance protection, and may have the site transferred to your name to protect you. If not, this is potentially risky, and you will be so advised. Even where you have Homebond, it may not cover your entire deposit. I could go on, but I'll resist as otherwise I might bore you all.
 
i would have thought it would be far easier and if anything more doable (is that a word?)
in the case of a second hand house as is missribena's case as the deposit is being paid against an asset that already exists.
 
In my case I applied for a top-up to current mortgage to use as deposit.
I will pay off when current house sold and before drawing down new mortgage
Banks will normally give top-up where top-up + current mortgage is less than 80% house market value
 
No its not being paid 'against' an asset- for there to be security, one would need a charge over the property. To obtain a charge one would need to firstly get judgement etc etc. In the meantime, who is to say that the property does not already have one or more charges or judgements pending against it...your deposit may become lost as an unsecured creditor being the last in a long line. Also, at contract stage the title has not been thoroughly checked, requisitions on title are not replied to, searches are not made..these may throw up matters which may make the purchaser want to, and within their rights, pull out.
 
I had a similar question recently,(who holds the house deposit) I have to borrow a deposit because the solicitor etc holds the deposit for my house. The banks will not give a loan until the contract for my house is signed, its catch 22. The banks also will not give a bridging loan if you do not take the mortgage with them. I do not need a motgage.
 
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