The importance of Source of Funds is critical when purchasing your first home
The importance of source of funds is essential in buying your first home, as you may find, you will be asked at numerous stages of the process for proof of your source funds. This will be asked by your Lender, Mortgage Broker, Estate Agent and Solicitor. Each body is regulated differently, but they ultimately have the same goal and that is to ensure that they do not become entangled in a Money Laundering scheme.
We, as your Solicitor, are regulated by the Anti-Money Laundering Regulations which require us to obtain all relevant documentation when establishing the source of your funding. This will require ongoing risk monitoring and we may need to obtain documentation throughout the process.
Whether you are purchasing your first home, a new home or additional home, the establishment of the source of your funding is a necessity.
When requesting evidence, we will require copies of your last three months bank statements for all accounts involved. This will include accounts to which money has moved to and from. If you are the recipient of a gift from, for example, your parents we will also require the last three months bank statements for all accounts involved.
This may be seen as overbearing and unnecessary and we have been asked, “Why can you not just take me at my word?”. Unfortunately, a lot of the time we do not know who you are and it is us that will be held liable should the firm become unintentionally entangled in Money Laundering. We would ask for the same information even if we had known you for 20 years or more.
The sooner you provide us with the information we require and allow us to do our job and follow the Regulations we are regulated by, hopefully the less stressful and the smoother the process may be.
When do you legally own/sell your house?
Whether you are purchasing your first, new or additional house or selling, it will always be an exciting and stressful time in which we appreciate your eagerness in wanting the matter completed.
The Law Society have stated that the average timescale for a conveyancing matter to complete is 16-20 weeks, but this may differ on a case by case basis as it will partially depend on factors which are outside of our control such as:
- Return your client care documents, ID for verification and source of funds;
- Correspondence/Response time of third parties e.g. Lenders, Buyer/Seller themselves, Solicitors acting for the Buyer/Seller; and
- Search timescales.
Once we are in receipt of your client care documentation including your ID and we are happy to proceed, the process will differ depending on the nature of your matter. Whether we are raising enquiries or answering enquiries, we will work to satisfy them all, however this stage will likely take a number of weeks.
We will report to you following all enquiries being answered and arrange for signature of the key documentation; contract and transfer and if applicable, the mortgage deed and stamp duty form.
You are not legally obligated to purchase/sell the property until the contracts have been formally exchanged. We will contact you for your authority which is your final chance to change your mind and not have financial consequences outside of our legal fees and any disbursements incurred. Once exchange has taken place you will be obliged to buy/sell the property on the date you have agreed.
On completion day, we will contact you as to when you will be able to collect your keys and you are the new legal owner or when your house has officially sold and you are no longer the legal owner.
Following completion, an application will be made to the Land Registry to register you as the new legal owner of the property. Again this process can take the Land Registry a number of weeks.