First Mortgage payment??

dalia_2

Can anyone help? I keep getting conflicting answers from the bank.

We are due to complete on our purchase 10th august and our direct debit is set up for every payment to go out on the 1st of the month.

When do we make our first mortgage payment and is it going to be lower than normal or higher?

Would we pay the full amount on the 1st of sept or the 1st of oct??

Please advise if you can

Thankyou

Joe_Bloggs

In my case (Nationwide) I would have to pay normal payment of capital and interest amount on the first of September, in advance. Then you have had their money since the 10th August so expect to pay an additional 21 days worth of interest on Sept 1st, paid in arrears. So the total amount would be higher. Many remember it as feeling like double when money is tight.
Some lenders charge mortgage payments in arrears, many want the money in advance. Who really knows at your bank? Name your bank and perhaps others can compare notes.
J_B.

MarkyMarkD

Most banks and building societies do it the way Joe says, but it could be a month later if the DD isn't set up in time.

In which case, the payment on 1 October would be for 2 months and 22 days (from 10 August to 31 October).

It isn't (particularly) that the payment is in advance, it's just in respect of the month in which it is paid and hence necessarily if it's on the 1st of the month it's in advance.

You can generally change the payment date (say to the end of the month) but not always before the first payment has been made. If you did this, after the pain of a large first payment, you'd have almost 2 months to rake together the money for the next (normal) payment.

dalia_2

Thankyou for the replies, the bank is the Halifax, and I got two differing replies from them!

chirpy007

Whoever l have used in the past my first months payment is always higher due to having the money for a part month. I beleive the Halifax will be the same

danielle21_2

Hi dalia, I have just last week completed on our house purchase (28th) & have a Halifax mortgage, I set up payment to come out on 28th of every month thinking I wouldnt have any interest to pay but they said they take the first payment 14 days from completion (being 14 August) with 4 days interest which amounts to £120 & then next one is for normal amount on 28th Sept.

Hope this helps

OxJak

We have just started a mortgage with Nationwide. Even though we completed the purchase on July 3rd the funds were released on June 29th, so we had a full month's payment + a bit of interest (which I thought was excessive for only two days!) which was supposed to have been in July (for various reasons it didn't come out straight away, but that's another story!), then a "proper" payment on August 1st.

They should give you notice a few days before the first payment is taken, but bear in mind it probably won't be on the day you've set up your DD for.