Question on deposit/exchange

[lessonsintightropes]

I have bought and sold three times before, but always exchanged and completed on the same day.

We are now in the running for two properties (very long story) and are pushing for exchange on the property we are more hopeful about. We were prepared to exchange quickly but then have a longer completion period (which is what our buyers have agreed for us).

We don't have £47.5k hanging around in the bank - as the deposit for our new house will come from our old one.

I'm sure other people are in this position - what happens? Does the mortgage company provide a bridging loan?

You usually get a deposit from your sale and then make up the difference.

So you exchange on your sale and get their 10% deposit say 30k and then you find the extra 17.5k from somewhere.

If you haven't got the cash then you'll have to borrow it or ask if your vendors will accept a reduced deposit of whatever you can raise.

The same thing is keeping me awake at night... We are buying a house that is almost double the value of the house we are selling. So even when the depost travels up the chain, it will not be worth 10% (should be about 6%). We do not have a spare 30k hanging around to make up the difference...

I have been upfront with our solicitor about this from the begining and apparently they can usually avoid the need to up the cost to 10% in these circumstances providing the vendors accept the lower depost. Apparently if we pull out (which we have no intention of doing) we would then be liable for the remaining 4% and we will have to sign something to that effect.

If this isnt possible then our whole purchase and sale falls through (and the other 4 people in the chain are effected too)

I will be completely grey soon!!

When we first bought we only had 5% in cash as we were getting a 95% mortgage. Our vendor accepted this cash deposit. The terms of the contract were that we would be liable for the full 10% if we did pull out, but they happily accepted less as a holding deposit ok exchange. Talk to your solicitor about it. It is really common.

Thanks everyone, spoke to our solicitor yesterday who confirmed that this should be very straightforward!