Mortgage Payment Taken Confusion

jayc100

Hello,

I have recently taken out a mortage with a lender and would like some help as to why the following payments have been taken.

Exchange Date: 23/10
Completion Date: 30/10

Payment 1 (including interest) was taken on 19/11
Payment 2 was taken on 01/12

It looks to me like I am paying back my fix rate mortgage in advance. Is this normal for fix mortgages because the interest is already calculated?

Thanks in advance.
JC

jayc100

theartfullodger wrote: »

When you signed all the paperwork, what date was agreed for regular monthly payments and was it payments in advance or arrears?? 1st of month perhaps???

I agreed the regular monthly payment to be the 1st, however I don't recall anything about advance/arrears payment options.

I assumed payment in arrears because I thought only rent worked in advance.

Sounds like the initial payment was a bit late (admin. & all that,, ) and you'll now be paying on 1st of month from now on.

Yeh I think your right. Cheers.

dunstonh

I assumed payment in arrears because I thought only rent worked in advance.

Wrong assumption. Most mortgages you pay in advance.

What lenders will do is either have a higher first payment or you make an interim payment before you get on to your normal direct debit date. Its to catch up the interest you owe in arrears from completion as well as the month ahead.

Dan_1976

Yes, first payment is interest and amount from completion date to the end of Nov, the next one is for Dec.

You always pay in advance, if you had not made these payments your account would go into the red!

I must admit, this subject is not explained clearly enough by lenders and sometimes brokers.

A KFI will show this payment but it assumes a completion date and it never seems to show this up enough.

Good luck

newbi

Hi, don't know if this helps but I completed on the 17th and Abbey who provide the mortgage sent a letter through with a breakdown.

First payment date is higher and is for £950.38 to be taken on the 5th of Feb. This is for the duration 17th Dec to 5th Feb, and then each subsequent payment will be on the 5th of the month for the regular repyament amount.

Ask the lender for a better breakdown perhaps?