Mortgage payments

chimaera_2

Hi,

Very quick question re monthly payments from a friend with out net access at work.

Does a mortgage lender take the monthly repayments on a arrears basis or advance basis.


A friend of mine took out a new mortgage with a completion date of the 16th Feb '07 which all went through with no hitches.

She has just checked a mini-statement to make sure pay has gone into account and notices two mortgage payment in two days as follows:

The lender took approx a third of a months payment on the 28th Feb (what i assume to be from the 16th to the 28th Feb, ie arrears basis) and then a full monthly payment today, 1st March (ie advance basis).

Which is correct, arrears or advance, or does it vary lender to lender?

Thanks in advance,

Chimaera

peterg1965

Mortgages are usually charged for a calender month. You can usually choose what day of the month the payment comes out. If you completed your mortgage mid month you could expect to pay your first payment about 4 weeks later for half the month that you completed and then the whole month following.

dwight-van-man

It does vary from lender to lender - sounds like this one charges in advance.