Exchange of Contracts - a detailed explanation and available help
Exchange of Contracts is one of the milestones of the home buying process.
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Here we explain the procedures involved in the Exchange of Contracts, a crucial stage of buying a property, and how Shire Direct can assist with a mortgage.
Table of Contents:
What does Exchange of Contracts mean?
Exchange of Contracts is one of the milestones within the home buying process. The Exchange takes place between the two Solicitors acting for the purchaser and the vendor (seller), after their preliminary work has been completed, and has proved to be satisfactory for both parties.
It is a crucial stage in the process, and any doubts as to whether you should buy (or sell) must be dispelled, as it is the point of no return! At Exchange the buyer legally commits to buy, and the seller legally commits to sell.
Why do I need a Solicitor, and what will they do in the exchanging of contracts process?
In committing their clients to exchange contracts, each solicitor must ensure that their client is able to securely complete the transaction. The purchaser's solicitor will need to inspect details of the property being purchased, together with a list of fixtures and fittings.
The solicitor will also carry out a number of property searches, including local authority searches to confirm that there are no compulsory purchase orders or adverse road schemes that will affect the property.
The search will also confirm that Planning Permissions are in order. A Water Search will be undertaken to confirm water supplies and mains sewerage connection. The Solicitor will also receive instructions from the lender, which will include the obligation to ensure that the purchaser will have clear title to the property on completion. It will also confirm that the lender is prepared to advance sufficient funds to enable the purchase to take place.
Once the solicitors have satisfied themselves that they should proceed towards exchanging of contracts, they will contact their clients to discuss and arrange a completion date. The completion date must then be agreed between both sets of solicitors, and when it is, the date will be inserted into the Contract.
The Contract Date is when the new buyer formally takes possession of their new home, and the date when the new mortgage starts. However, the new buyer will responsible for insuring the property from the date of Contract Exchange.
What about a deposit for a house purchase?
Many of those buyers not borrowing 100% of the purchase price will have to provide a deposit for a house purchase in the UK, usually of around 5% to 10% of the agreed price at the time contracts are exchanged. However, there is a practice where it is normally acceptable to pay a smaller deposit, although obviously this will have been negotiated in advance.
When contracts have been signed and exchanged, the solicitor acting for the purchaser will give the deposit to the seller's solicitor. The vendor's solicitor will hold the deposit until the completion date, when the deposit will be paid to the seller along with the rest of the purchase price.
Can Shire Direct arrange a Solicitor for me?
Yes of course!
The solicitors we can nominate will also provide a competitive legal package, usually without the necessity to pay legal costs up front.
Need more information?
Then don't hesitate to contact us! You can contact us online, or call one of our qualified Mortgage Advisors here at Shire Direct on Freephone 08000 282 281, our telephone lines are open everyday including Saturdays and Sundays from 8am until 10pm in the evening. We will of course try to help in any way we can, and we'd love to hear from you!
The overall cost for comparison is 9.8% APR.
The actual rate available will depend upon your circumstances. Ask for a personalised illustration. APR variable and based on a usual case. Most customers are likely to receive a lower rate or the same rate as our overall cost for comparison rate - learn more about APR.
There are no upfront broker fees.
However, a fee may be charged on successful completion. An indication is that on conforming cases (straightforward applications with no or minimal adverse credit) a fee may be charged of up to 1% of the amount advanced, typically £795 and will depend on your circumstances.
For non-conforming cases (where case research and processing may be more complex due to adverse credit or unusual circumstances), a fee may be charged of up to 3% of the amount advanced, typically £1,995.
THINK CAREFULLY BEFORE
SECURING OTHER DEBTS AGAINST YOUR HOME.
YOUR HOME MAY BE REPOSSESSED
IF YOU DO NOT KEEP UP REPAYMENTS ON A MORTGAGE OR ANY OTHER DEBT SECURED ON IT.
Adding existing debt to your mortgage will increase the repayment term and overall cost.
Are you worried and becoming stressed because you are having problems getting a mortgage or remortgage? Worry and stress no more! Here at Shire Direct we provide tailor made mortgage solutions to suit you, and can usually help with all kinds of circumstances including...
Remember, we're here to help, and would love to hear from you!
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