Equity as Deposit??

D

dillons

Registered User
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119
Hi,
I have approx 130K equity in my property. I am thinking of trading up. I don't have any other borrowings but only have savings of 5K.
The property I am looking at buying is 350K and I would need a mortgage of 250K.
Can I do all this without having the 10% contract deposit (35K) in cash?? How would this work? I would be looking to get sale contracts signed couple days before purchase contracts but from what I remember last time I sold & bought, the purchasers solicitor held onto the 10% deposit until close so I couldn't use this. Would the bank release some of the mortgage at contract signiing stage to cover deposit given the equity or would I have to get a loan for this???

Thanks,
dillons
 
Hi Dillons
I'm afraid you will have to cough up the cash. Your Solicitor is obliged to keep the deposit (on any sale) until completion of the transaction. In relation to the Banks, it depends on whether the House is second-hand or a new-build. They will also look at the area in which the house is situate.
 
You can't get your mitts on the mortgage money until completion but you have a number of options;

1. Ask your solicitor to negotiate a lower deposit with the vendor's solicitor - 10% is traditional but not mandatory.

2. Ask for a top up loan on your existing mortgage. Lenders are normally happy to do this if you are taking your new mortgage with them.

3. Get a short term unsecured loan from your bank.

Kind regards,

Sarah
 
I bought a new place recently and my Solicitor told me that Stage Payments were now illegal. That meant I only had to fork out the deposit and the rest of my mortgage was paid on completion.
 
Stage payments are not illegal otherwise how would people build their own homes?! It's not possible to drawdown part of the mortgage before completion but stage payments for self-build and small developments are common place.

Sarah

www.rea.ie
 
Apparently a Developer/Builder cannot put stage payments into a contract. It has to be a deposit and then completion money. Building your own place is a different situation.
 
I traded up 5 years ago. I put down a 5000 booking deposit with estate agent and that was it.

I was not required to put any further funds down as my solicitor successfully showed that as I was sale agreed on my house and had my mortgage was all ready to go there was no problem in me securing the funds to purchase the house and that the 5K was more than sufficient to see my willingness to purcfhase and not pull out of the deal.

It is possible to do it but you will at least need a booking deposit that both parties agree is suffcient
 
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