Source Funds and Caveat Withdrawal

[JenniferHan]

Hi,

I am just thinking what would happen if we, acting for Purchaser, overestimates the source funds and the incoming mortgagee therefore puts more funds than required at settlement, with purchaser/borrower's authority. Will the settlement go through anyway and where will the excess go? How does that work? The loan and purchaser's equity are both provided by the same incoming mortgagee, bank.

and Another question is - I understand the purchaser's caveat will automatically lapse at settlement, which means there is no need to withdraw the caveat before settlement. However, is there any fees involved for the withdrawal? Does the purchaser need to prepare extra money for any PEXA fees and withdrawal fees in relation to such withdrawal?

Thanks in advance!

[IsaacK]

Hi @JenniferHan ,

If there are more source funds than required and those funds are not reduced, you can also direct surplus funds to a particular account as a destination. This helps ensure the workspace is balanced because any workspace with a financial settlement must be balanced to proceed.

In regards to your second question, if the purchasers caveat is to auto lapse, then there is no need to create a Withdrawal of Caveat document. Thus there would not be any PEXA fees as these PEXA fees are charged per role, per document that you are involved with.

Regards,

Isaac

[JenniferHan]

Hi Isaac,

Thank you so much for your reply.

For the second question, I suppose the auto lapse of purchaser's caveat does not incur any costs to Land Registry Services, am I right?

Jennifer 

[IsaacK · Accepted solution]

Hi @JenniferHan 

I do not believe it would, but it would be remiss of me not to direct you to ask that question to the Land Registry in question to confirm.

Regards,

Isaac

[JenniferHan]

Hi Isaac,

Update - yes you are right on this - No costs for auto lapse.

Thank you.