Purchaser requesting mortgage amount oweing

Hello,

In the process of selling, and the purchasers solicitor has requested our mortgage amount owing to the bank, and suggested that they will pay this and do the discharge first, and then follow yup with balance.

Is this in any way normal or common practice?

seems unusual.
Your solicitor should be paying back your mortgage, not the buyers.

That's what I thought; a) it's strange and our solicitors duty b) they'd then have a charge over our house if completion didn't happen?

It's sending up red flags for me, should I be worried or not?

Don't be worried.

I think this is all about a very standard clause in the contract. The Vendors solicitor provides the details of the outstanding mortgage due and the the purchase price can be paid as to a) the amount of the mortgage and b) the balance of funds.

In reality, the entire purchase price is paid to the Vendors solicitor on their undertaking to discharge the mortgage and furnish evidence that the charge has been removed in due course.

mf

it is none of the purchasers (or purchasers solicitor's) business how big the outstanding mortgage is.
All that counts is the agreed sales price.

"it is none of the purchasers (or purchasers solicitor's) business how big the outstanding mortgage is.""

Well, in the season that's in it, Oh Yes It Is!

Negative equity and all that

mf

mf1 said:

"it is none of the purchasers (or purchasers solicitor's) business how big the outstanding mortgage is.""

Well, in the season that's in it, Oh Yes It Is!

Negative equity and all that

mf

Click to expand...

The amount of the mortgage has no relevance. Even if the place is in NE (which we don't know from the OP), the amount is not relevant.
If it is NE scenario and the agreed sales price doesn't cover the mortgage, all that is relevant is to inform the seller that closing might take longer or have a certain amount of risk associated with it. But details on the exact amount? None of their business.

I would not appreciate if my solicitor or my bank tells a 3rd party how much money I owe to the bank.

Beg to differ.

Standard Contract clause below- includes disclosing the outstanding mortgage amount


4. The property being sold is subject to a mortgage in favour of Bank of Ireland Limited. Prior to completion the Vendors shall inform the Purchasers of the sum required to repay that Mortgage and the balance of the purchase monies shall be paid to the Vendors’ Solicitors in the following manner:

(a) Bank Draft in favour of Bank of Ireland Limited Limited for the balance outstanding to the Bank.

(b) Bank Draft for the remaining balance of the purchase prices in favour of the Vendors’ Solicitors.

The Purchaser shall on closing accept the Vendors’ solicitors undertaking to redeem the mortgage in favour of Bank of Ireland Limited Limited and to furnish a copy folio showing the cancellation of the mortgage as a Burden at Entry Numbers 6 and 7 at Part 3 of Folio XXXXX County Dublin within one week of receiving notice of completion from the Property Registration Authority

mf

mf1 said:

....In reality, the entire purchase price is paid to the Vendors solicitor on their undertaking to discharge the mortgage and furnish evidence that the charge has been removed in due course.

mf

Click to expand...

Hello,

I think that is the reason the purchaser's solicitor is proposing to make the payment directly to the current mortgage provider - they want to ensure that the discharge is furnished immediately etc. Historically, we have all seen delays with this.

Personally, I would not have a problem with it as long as the transfer to my mortgage provider and the residual balance to be paid to me, were all being paid over in cleared funds, in advance of completion.

Moved house recently. I have no idea of the legal in and outs of it, but the above is the way our solicitor dealt with it. I took it is as standard.

MrEarl said:

Hello,

I think that is the reason the purchaser's solicitor is proposing to make the payment directly to the current mortgage provider - they want to ensure that the discharge is furnished immediately etc. Historically, we have all seen delays with this.

Personally, I would not have a problem with it as long as the transfer to my mortgage provider and the residual balance to be paid to me, were all being paid over in cleared funds, in advance of completion.

Click to expand...

This won't work.

There is no reason to believe that a discharge will be furnished immediately. Worse, the lending institution has no relationship with the Purchaser's solicitor and cannot answer queries, confirm payments/receipt or deal with them.

In any event, there is usually a simultaneous ( or as close as) transfer of funds, arrangement of searches, and release of keys/vacant possession in any transaction plus the Purchaser's solicitor will have no authority to release funds directly to the vendor's lender.

Can we go back to post number 4? It works, its how it happens, it really is.

mf

thank you all, good to know it's 'normal'.
However, it's a huge intrusion as surely our legal representative (him being a solicitor) undertaking to discharge it, should be good enough?
We've asked that if they need to know this both cheques must be issued to our solicitor together.
It feels like a stalling tactic.