Confusing remortgage offer.

cjm66

Help! We're in the process of remortgaging as we have come to the end of a 5 year fixed rate. London and Country have been great up to now and chose a Nationwaide mortgage for us. However, we've just had the mortgage offer through and although we asked for a mortgage with no up-front fees we're being asked to pay an extra £780 with the first month's payment. It calls it 'Interest charged in the month of advance'. What is this payment about, and will all mortgages have it?

dimbo61

In a word yes !
Say you take out the mortgage and get the funds on the 1st then the mortgage payment comes out on the 25th of each month this charge is for the first 24 days interest.
Next month you will just pay the monthly amount you have been quoted.
If you did not pay this (interest) you could end up at the end of the year owing more than you borrowed in the first place.
Go for another 5 year fix with Nationwide if you can its a sensible move in todays climate.
Try to overpay ( allowed £500 a month ) if you can it will save you thousands of pounds of interest GOOD LUCK

cjm66

So every mortgage is going to whack us with a huge first month payment?! Am I being really dense, does everyone know this? The Mortgage offer tells us to budget for it, but we've only just found out about it!:eek:

minimike2

Yes this is the same with all mortgages, however the amount will vary dependant on the date the mortgage completes and the date the first payment falls due. If the solicitor times the completion right then you can avoid having a payment followed by another payment

~Yorkshire_Belle~

Crickey! So when will I find out how much this will be as am just at start of remortgage [STRIKE]nightmare[/STRIKE] process

cjm66

minimike2 wrote: »

Yes this is the same with all mortgages, however the amount will vary dependant on the date the mortgage completes and the date the first payment falls due. If the solicitor times the completion right then you can avoid having a payment followed by another payment

Thanks. We currently pay our mortgage on the first of the month. When would be the best time to complete the new mortgage to minimise the impact on us?