10% contract deposit

"Full purchase price (to include booking deposit, 10% contract deposit and final balance) "

If buying a house and getting 92% mortgage,does the 8% of the balance of payments cover this?

Or do they normally want 10% of the price of the house,aswell as your booking deposit etc....

I'm not sure about the first question but IME the contract deposit is 10% of the purchase price minus your booking deposit.

Sorry if its not clear,do EA's insist on you giving a contract deposit of the 10% or beacuse the mortgage is for 92% is a smaller amount for deposit ok?

In my experience, it was advertised as 10% deposit upon contract. But in the end, they only asked for 5%, so perhaps you could negotiate it.

kopkidda said:

Sorry if its not clear,do EA's insist on you giving a contract deposit of the 10% or beacuse the mortgage is for 92% is a smaller amount for deposit ok?

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generally speaking the mortgage you get and the amount of deposit you owe are not related.

Teh developer/EA doesn't care if you have to get a mortgage for teh property.

All they want is 10%.

It's your own issue as to how you raise this 10% - be it through a mortgage or whether you have the cash sitting in your account.

It shouldn't do no harm to ask if the 10% could be reduced. I recently bought a house and I asked if I could get the contract deposit lowered to 5% and it was fine.

You can ask your solicitor to tell the vendor that you have a 92% mortgage and all you have is 8% as a deposit - I did this and there was no issue. If it comes to it, ask the bank if they'll give you the extra 2% in advance to make up the deposit - we asked ours at the time and they said they would, might have changed now though.

Thanks for your responses,I will tell the solicitor we have 92% mortgage.

kopkidda said:

I will tell the solicitor we have 92% mortgage.

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Eh? You don't tell them what you have - it will be self evident from the documentation which the solicitor will be privy to in dealing with the conveyancing and mortgage drawdown etc.

ClubMan said:

Eh? You don't tell them what you have - it will be self evident from the documentation which the solicitor will be privy to in dealing with the conveyancing and mortgage drawdown etc.

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Yes - eventually BUT clients may not actually have finalised their loan aplication/ approval by the time contracts issue to the purchasers solicitor so solicitor may not know at that stage how their clients intend to finance their purchase. They will ask but many clients are still massively naive about how to fund and the legal binding steps involved in a purchase. I have a prospective purchaser at the moment who is willing to sign binding contracts and pay a full 10% for the purchase of a property from my client ( the vendor) against the strenuous advice of their own solicitor. They need to sell their own house to complete on the purchase and they are adamant that their house will sell within the time frame my client requires. Despite the fact that the house has been on the market for a few months with not a sniff of a purchaser. That level of naivety is beyond shocking.

My instructions in that case are to issue contracts, accept signed contracts with a full 10% deposit and enforce/rescind the contract in due course - including, if necessary, holding on to the full 10% deposit until and if we find another purchaser.

mf