Help needed re budget for 1st month's mortgage/initial interest payments

jojoyay

Hello there
I am buying my first house and due to complete on the 5th Jan, so I am frantically trying to budget for our first month in the house. I get paid on 22nd Dec which is good for Christmas but then don't get paid again until 31st Jan. Therefore, I need to know what (if any) payments I can leave until the start of February and could do with answers to the following questions from someone with housebuying experience please:

1. When do solicitors tend to ask for their final payment and how long do they give you to pay them? (we still have to pay £620.75 of the £795.75 total).

2. When will the first mortgage payment be? I think we asked for payments to be the 6th of the month. As we (hopefully) complete on the 5th Jan do you think 1st payment will be requested for 6th Jan or 6th Feb?

3. (related to the above) I am aware of initial interest but not quite sure how this works - could this mean that I basically pay 2 months of mortgage payments on 6th Feb? - Is 'initial interest' essentially equal to mortgage payment (reduced accordingly relating to amount of days) or is it actually less than this - ie. an amount calculated based on the interest that the mortage has accrued in that time?

Many thanks for any help on this

Oh the joys of house buying in the busiest and most expensive months of the year! :rolleyes:

mrsc_4

I don't think I can help too much but I'll try, but we completed on the 6th Dec and our first payment was taken yesterday the 19th it was about £300 less than the normal monthly payment will be, one thing we were slightly caught out on was the insurance side its usually £169 a month but they wanted to take 2 months in one go, I can't remember why though!

Our solictors bill was settled almost immediately both times we have brought so I would expect to have to pay that straight away, we had a final breakdown and bill after exchange.

With the inital interest your mortgage advisor should be able to advise how much you should expect to pay or you might have a breakdown in your mortgage paperwork.

honeypop

I just completed first house purchase last week (14th) , we had to pay the balance of the solicitors fees before completion would take place.

Our first mortgage payment is due on the 6th January and is slightly less than the normal monthly payments which would be due on the first working day of each month, however we were also sent notification that we need to pay a payment of the interest amount from completion to the end of the month, this is payable immediately. This one was a bit of a surprise, no-one had mentioned this and it is in no paperwork, so we just expected to pay first payment in January, and now have another one to pay straight away of 50% of the normal monthly payment.

This is with Northern Rock.

kjl26

Our payment date is on the 6th, we completed 23 September and the first payment came out on 6 November...slightly higher than normal. That was with Abbey. Hope that helps rather than confuses you further...!

Curley

I completed on 10th November, my first payment was taken out on 1st December - my choice to have it taken out on 1st of every month. But I had to pay nearly £200 extra due to "completion interest".

Normal monthly payments should be £360 but my first payment was £550 even though it was only 3 weeks after completion. I'm with Nationwide.

I also payed my Solicitors fees when I paid my deposit, which was about a week before exchange.

dunstonh

1. When do solicitors tend to ask for their final payment and how long do they give you to pay them? (we still have to pay £620.75 of the £795.75 total).

Within days of the completion normally.

2. When will the first mortgage payment be? I think we asked for payments to be the 6th of the month. As we (hopefully) complete on the 5th Jan do you think 1st payment will be requested for 6th Jan or 6th Feb?

Depends on the provider and if you are paying in arrears or advance.

I am aware of initial interest but not quite sure how this works - could this mean that I basically pay 2 months of mortgage payments on 6th Feb?

Possibly that will be the case although you may find an interim payment in January. It depends on the lender.

These questions should be answered by your mortgage adviser who should have given a lot of this information as a matter of course. Especially the payment details.

danm

if you complete on 5th, with a requested payment date of 6th, then your first payment (assuming your lender operates as i am assuming) would be on on 6th Feb.

It would be your usual amount + initial interest

initial interest can roughly be calculated as

((Loan Balance * interest rate on mortgage)/365)*number of days

danm

in your case, number of days = 30

jojoyay

Thanks so much all of you for your prompt and helpful responses. Think I am going to phone my mortgage provider (YBS) today and ask for the details from them. Useful (and scary) to know that the solicitor is likely to expect payment very soon too.

Better not buy too many mince pies then!

Thanks again and Merry Christmas