Mortgage period confusion

Llyllyll

I have recently received my first statement from my new lender and was surprised to see that I have longer to pay than I thought. Here're the details:

• Mortgage agreed/funds released on 12/07/06.
• First official DD payment wasn't taken until 01/09/06 but I was charged an additional £393 for the interest incurred between the funds being released and the first DD being taken.

I thought that as I have been charged and have been paying for the mortgage since 12/07/06 that my actual payment regime would start from that date, however my lender says that the actual repayment period starts from the date of the first official payment.

Is this normal practice?

Thanks,
L

Cazza

Depends which lender you're with! You will always be charged interest from the date of completion, some lenders will add this additional interest to your first direct debit payment, others will ask you to post them a cheque for the extra money.

Cazza

Sorry, just reread your post! I'm assuming you're on a repayment mortgage? If so, 1/9 sounds correct to me. The £393 would have just been the interest on the money they sent you, it wouldn't have paid anything off the capital, therefore your first payment which actually included some money to pay off capital as well as interest would have been on 1/9, so this is the date you officially started to pay off your mortgage. Are you with Northern Rock??

Llyllyll

Cazza wrote:

Depends which lender you're with! You will always be charged interest from the date of completion, some lenders will add this additional interest to your first direct debit payment, others will ask you to post them a cheque for the extra money.

Yes, but I paid this extra on the same day as the 1st payment (by the same DD) - nearly £900 in all! Now to my mind that additional £393 should be classed as a payment but the lender says it isn't. Surely this is wrong?

Edit - Just read your last posting. Thanks.
I'm with The Principality for info.

danjberry

let me try to explain how it the first payment works where i work (a lender). interest is added to the first payment as the payment, on the 01/09 for yourself, would be the payment for the whole of the month of sepetembers. the additional money is interest charged from the day they released funds till the day you make your first payment as you have had the money in your possession since then, 12/07 for yourself, so they have a write to charge you interest for this period

does that help? not quite sure i have explained it well