Property Settlement - in What Priority Are The Different Types of Funds Used?

Hi,

Settlement is scheduled in a few days time. Trying to find out what order the different types of funds are brought to the table.

Amount needed to settle: $1million (after the 10% deposit when contract was signed, inclusive of stamp duty + misc fees)
Home loan from Bank: $600,000
At my bank account which I have signed a shortfall form for the bank to withdraw: $90,000
At solictor's trust account: $750,000

Guessing that the Bank will want me to draw the $600,000 hence they can start charging interest, whilst my solictor will pay the remaining and then refund me the rest? Is this "guestimate" the norm?

Cheers!

Comments

  • +2 votes

    From memory, your settlement solicitor arranges for the funds to be available at your direction.

    •  

      Thanks mate!

  • +1 vote

    It is by direction, but the usual course of events is that you will want the bank to provide as much funding as they are willing to so that you have it available as a line of credit later. Immediately after settlement, drop in your additional funds to reduce the interest bill.

    The way you've set it up is a little unusual. Normally you simply pay the deposit that is obviously held in trust until settlement. The bank then tips in whatever they are going to tip in, and you need to have the balance of funds required available in a nominated bank account at the bank providing the funding. It all then nets out to the required amount (noting there are always ons and offs so you need to have a buffer in that nominated account) which is then taken from your nominated account and off you go with your keys.

    • +1 vote

      Thanks mate!

      Will let the bank provide the max and then have whatever refunded deposited into the offset.
      The 10% deposit was paid to the real estate's trust account after contract sign.
      The bank is happy for the funds to be parked at my solictor's trust account before settlement, and I have sourced a bit more which is parked at my account (which the bank has access to).
      Anyway, thanks and will ensure there is a bit of buffer.

  •  

    Your solicitor will tell you the shortfall you need to bank cheque or electronic transfer.

    Amount needed to settle: $1million (after the 10% deposit when contract was signed, inclusive of stamp duty + misc fees)
    Home loan from Bank: $600,000
    At my bank account which I have signed a shortfall form for the bank to withdraw: $90,000
    At solictor's trust account: $750,000

    Why would you have $750k in your solicitor's account? Don't even electronically transfer until 5 business days before settlement date.

    •  

      Thanks mate! Reason why the money is in the solicitor's trust is because I was having issues with the loan being processed correctly, which is why we have had to scrambled to get whatever funds we can get our hands onto hence it's in the trust (and it's less than 5 BDs before settlement). Cheers!

      •  

        Solicitor should give you a refund then

        •  

          Agree, thanks again!