Amount of deposit when moving home

[Worriedmum40284]

This is probably a silly question but just wanted to make sure I'd got this right.

We're (hopefully) due to move in the next month or so. We used a mortgage broker to arrange our mortgage and estimated how much deposit we wanted to use from our equity, taking into account costs we wanted to come out (EA fees, SDLT, solicitor fees etc.)

If we end up having more money left over after the above, does that just get transferred to us on completion day? And is there anything else I need to be aware of with this?

Yes it gets transferred to you on completion via solicitor

The starting point is that you need a 10% deposit. If your buyer does 10%, you can normally use that money and pass it up the chain and add any difference. Your equity doesn't help with the deposit.

For example if you are selling for £200,000, you should get £20,000 from your buyer. If you are the buying for £300,000, you need £30,000 so need to find another £10,000 from savings.

You will also need money for searches etc up front

We've paid all the up front solicitor costs to cover searches etc.

I'm not aware of how large our buyer's deposit is - should I be? EAs and solicitors all aware of purchase prices and no one has mentioned this to us.

No it doesn’t matter where the money comes from. You get £200 000 for your house whether that’s 20k deposit and 180k mortgage, or 100k mortgage and 100k deposit. Or a cash buyer. It’s all the same to you.

From the 200k you need to clear your existing mortgage. So say you had put down a 15k deposit and bought the house for 150k, you pay back the 135k on your mortgage, and get back your 15k plus the 50k profit.

You need to pay the fees and stamp duty which you can either do from this 65k or from your pocket. You can put all of it into the deposit or keep some back. E.g you might put down 40k deposit and get a mortgage for 260k on the 300k house because you want £25k available in cash for renovation.

The solicitor will sort all this for you - the disbursements. You don’t need to sit there and make payments to estate agent/stamp duty/solicitor fees on the day.

Generally, the deposit passes up the chain. So in the example above, everyone accepts the 20k from the first time buyers as the deposit at exchange.

Yes, if there is money left over, it will get transfered to you. Our cash arrived the day of completion and DHs birthday

Yes any remaining funds will be tranfered to you by the solicitor on completion.

Thank you all, that makes sense, hoping exchange should be imminent now and that we might end up with a bit more coming back to us on completion than we originally thought which will be handy!

Yes ours passed up the chain. We would have needed an extra £40k if we put up 10% between our sale and purchase but this didn't happen. Our vendor was happy to accept a lower deposit than 10%

You don’t always get to know the amount of the buyer’s deposit.

It will be around 10% though sometimes as a Seller I’ve been asked if we’re happy if our buyers deposit is less than 10% which we have been. Sometimes we haven’t been given any information about it and the solicitors make sure it’s all ok.

While the FTB may provide a deposit 10% of the agreed price, as that deposit moves up the chain it will represent less than 10% of the agreed price higher up the chain.

Hope you Exchange soon @Worriedmum40284

Thanks so much @Twiglets1 - that's really clear and helpful.

It looks like the solicitors are sorting it out between themselves - fingers crossed.