Buying and selling - is our exchange deposit not enough? In a panic!

[rosemarycait96]

We are hoping to exchange next week on our house sale and purchase, and complete in mid-October. Chain is 4 parties, we're 2nd from the top with 2 below us.

We have just had an email from our solicitor saying "you can transfer the £24k odd that we need from you as per the draft accounts provided". Um... This is first we’ve heard of ANY money being needed from us on exchange. We hadn't received the draft accounts yet and didn't know this. We don’t have enough in the way of savings (10k in the bank), we just have our house sale, equity, etc.

We're selling for 305k, buying for 395k. Obtained a mortgage with 85% LTV.

In a total panic right now - just eaten my own bodyweight in pasta while in shock from reading the amount. We simply don't have the money and weren't told that we'd need to save up more/fork up cash on exchange. We'd ask family for money, but it's a lot of cash and my SIL with mental health problems has gone missing this week, everyone is rightly tied up with that and we're all worried. I'd hate to ask for money from family at a time like this.

I thought deposits usually just worked themselves up the chain on exchange? In that case, is it that the deposit from the chain isn't enough?

We (perhaps wrongly) were thinking all of the proceeds from our house sale + buyer's deposit would be the deposit for our purchase.

I've emailed the solicitor back asking for clarification but will be calling him in the morning to discuss. Before I ask him any stupid questions, could someone please explain how this has been worked out? Is there anything we can do at this point?

How does the stamp duty announcement affect it? That might have come just in the nick of time hopefully...?! 🤞

We can borrow anymore money on the mortgage, can only do a maximum of 85% LTV because I have adverse credit, it was the best deal we could get and the most money the lender would let us borrow.

The solicitor has sent over our completion balance (turns out they thought someone else had sent it to us weeks ago, when they hadn't... Brilliant, eh?). Unfortunately the breakdown all makes sense - I don't know where exactly we went wrong in working things out, but we have ended up overestimating how much money we'd get from the sale of our house somehow.

We were never told a ball park figure for completion balance, otherwise we'd of course have put more effort into saving enough money! Hence the shock.

Oh and yes, happily the SDLT announcement means it will actually go down by 2.5k. So more like 21.5k - every little helps, ha.

*sorry - on the prev. post, I mean we 'can't' borrow anymore money on the mortgage, not can. I wish!

If you can't afford it you may have to pull out OP, catastrophic as that would be for the rest of the chain. Surely you couldn't have saved another 10K over 7 months even if you had the right figures at the time?

I would not be expecting to exchange next week, OP. Even if you can borrow the money from family it needs to go through money laundering checks and your solicitor will need to see a letter from family saying it’s a gift: if it’s a loan they’ll need to alert your mortgage company that you’re taking on additional debt, which will affect your affordability.

Thanks all - I may ask our solicitor for advice. My husband and I can cobble together about 18k between us but that still leaves a shortfall which would have to be made up with money given to us.

@ChicCroissant we quite possibly could have done, would have been a push but if we'd known earlier in the year, it would have been possible.

The solicitor has obviously already done the checks, and thinks you have the funds.
If you can borrow from family, I'd just pay it all next week, then take a loan after completion to repay them if needed.

This happened to a friend of mine recently, they hadn't taken into account the early exit fees and interest from their existing mortgage and miscalculated by around £7k.

I’m confused where your original £10k estimate came from when the stamp duty (under old rules) would have been that alone, then conveyancing fees x2 and estate agents sales fees on top? Hope you can find the cash needed OP

@LionessesRules - in my experience the solicitor only checks the funds are in place to buy the house, the bank normally asks at the mortgage appointment whether you’ve considered the funds needed for SDLT and professional fees.

Do you know what they ended up doing to rectify their situation?

@ChilliBandit that's what we're hoping.

I've asked my solicitor to clarifying whether it's an issue at this stage, we'll see what they say.

They sold one of their cars to temporarily raise funds to complete the purchase.

UPDATE: Spoke to solicitor, and we need to declare it as a gift. They'll do that for us, which is fine.

What is not fine:

Things developed rather quickly. Our buyer has said out of the blue that their mortgage offer expires next Friday and they need to complete ASAP - it's the first anyone, including our solicitor, has heard of that. Everyone is scrambling to gets funds requested in case they can't extend their mortgage offer, and if they insist on the 30th we'll exchange and complete within 48hrs of each other next week. Yikes.

Just to be aware the relatives giving you the money will have to screen shot the account to show the transfer as well as complete the declaration of it being an outright gift. May be easier for the money to come from one account if you are in a hurry.

That’s stressful.
Simultaneous exchange & completion on the same day is also possible but not recommended for the nerves!

Looks like that's what's happening!

The good news is:

My husband, being the maths genius that I will never be, spotted that an early repayment charge of £5600 was included in our mortgage figures where it shouldn't have been - we're porting our deal across and it should never have been included in the final balance due from us.

So, with that amount minused, minus the stamp duty cut (thanks Liz), means the amount due from us is much more achievable. It'll be tight, but we don't need to borrow money and that's the most important thing.

Pray for our simultaneous exchange/completion! We're selling a help to buy house which does complicate the process so it is actually going to be super tight.

The 24k is in fact our completion balance, after stamp duty, fees and everything had been taken into account. We had calculated that we'd need 10k, 13k at the most to complete. It's actually more like double that...

out of interest…. What are your finances like generally? Because I can’t get my head vaguely thinking that £10k, £13k most would be need, without doing an iota of research

My husband, being the maths genius that I will never be,

Not on the basis of what you’ve said in this thread! 😂

@Doingprettywellthanks ha, you're not wrong there. But honestly, our mortgage advisor was the person who gave us the ballpark figure near the start so that's what we went on. Our solicitor neglected to provide us with the actual amount until yesterday.

As for the 24k itself, like I said above there's a chunk of that being removed due to the early repayment charge being added on where it shouldn't have been. For the remaining difference, I can only assume we were poorly advised and have also been massive numpties.

The remaining amount will be tight, but we can do it.

What is the value of the property you’re buying? Surely you could have done the very simple calculation to work out stamp duty and then added on the estimated conveyancing fee (they always put that in writing - the estimated fee)

And to start a mumsnet thread before picking up phone to your solicitor?

come on op - you’re making biggest purchase of you life!

Oh come on, everyone else here has been super helpful with advice, I don't need to be berated for not working it out correctly, everyone makes mistakes.

Thanks to those who did give good advice, we got there in the end :) Leaving this thread now though.

I am not “berating” you

but this is a huge purchase and you didn’t bother to do even the most basic research re stamp duty or fees - literally a thirty second google. And to start a mumsnet thread rather than just picking up phone to clarify is baffling.

Have you never received a piece of information and panicked? Reacted without thinking logically? During a pretty stressful time (moving house, pregnancy)?

And yes, we'd all like to think we'd researched thoroughly and properly. But sometimes it doesn't work out like that. Sometimes we're a numpty, sometimes we drop the ball, sometimes we think 'someone else' has done it.

In both these issues, the key is to forgive yourself and move on. And ignore anyone who criticises and says 'I wouldn't have done that' from the comfort of their smug armchair.