Best day to start a mortgage?

GMS

Over the term of the mortgage you cannot save by picking a day. If you pay over for a half month and a full month with your first payment then you have a half month to finish with.

Over a fixed term it will all work itself out.

Ivrytwr3

now that explains it. Thanks. I was sure i was advised previously that due to interest calculations it was best to start a mortgage on a particular date in the month; i just couldn't remember why or when!

Ivrytwr3

Ah wait a minute! So it's the first payment people were referring to? Depending on what day you start the mortgage depends on how much your first payment is?

OK, to pay the least amount for your first payment, what day of the month is best?!

getmore4less

GMS wrote: »

What if the job is lost? Same risks.

Who said no buffer funds?

Delayed income and loss of income require totaly different stratagies.

They are NOT the same risk.

GMS

Lenders will calculate based on a day, often the 1st.

If you complete mid month then your first payment would be a ful month, and the half you completed in.

If you completed on the 1st you would have a month's payment.

At term end if you had paid half a month upfront you would finish the term halfway through the month, if on 1st you would pay the full month.

You cant pay it twice, it is either up front or back end.

Hope that makes sense, I have had wine!!

Ivrytwr3

ha! ha! OK, one word answer GMS. If i asked you:

"I want to pay the least amount possible on my first mortgage payment. What date would that be?"

dunstonh

"I want to pay the least amount possible on my first mortgage payment. What date would that be?"

Depends on the lender. Some may take an early interim payment. Some may roll it into the first months payment. However, typically, its as close to the payment date as possible but not after.

i.e. if payment date is 1st and you are advanced the money on the 20th then you have the month in advance and the 10 days in arrears (assuming 30 days in month) in that first payment.

GMS

Ivrytwr3 wrote: »

ha! ha! OK, one word answer GMS. If i asked you:

"I want to pay the least amount possible on my first mortgage payment. What date would that be?"

Whichever day your proposed lender calculates interest on.

getmore4less

GMS wrote: »

Whichever day your proposed lender calculates interest on.

Given most lenders now calculate daily and add monthly how does it make any differnece?

If you pay the money as soon as you have it it saves interest.

Some lenders you get no choice on interst or payment date and they are different

My interest is added on the 1st payment is the 16th.(Barclays)

GMS

Interest will be charged from release of funds which is never the day of completion so no matter how great your planning you will always be a couple of days behind.

You can always choose your payment date.

Regardless of when it the loan starts you will only ever borrow the money for the chosen term. First month's payment could well be higher, but the last payment will be the opposite of the first.

A lender cannot charge interest on money that is not drawn down, or repaid so it will all work itself out.

If you complete with a 2 week window of interest you still owe it. Difference is it is paid, not deferred.

Impossible to pay more interest based on date of completion.

Out of interest if anyof the posters bought a car would they be so concerned on date of drawdown?