Remortgaging - paid double interest for 4 days

beefturnmail

My remortgage completed on Tuesday 2nd October, however my new mortgage company are charging interest from Friday 28th September as apparently this is when the loan was drawn down and the money transferred the money to the solicitor.

Upshot of this is that I've paid double interest on the loan for the 4 days 28th Sept to 1st Oct - once to previous mortgage company, once to new mortgage company - even though its only 4 days interest, as its a large loan, it's a non-trivial amount.

This doesn't seem right to me - The mortgage couldn't complete until 1st October as I specified this to avoid paying an Early Repayment Charge to, however when I took the original mortgage on buying the house, the loan was drawn down on the same day as completion and interest was charged from the completion day, not before.

Has this happened to anyone else? If I complain about this - who would I take it up with - the mortgage company or the solicitor?

harvey115

4 days is a bit accessive but you need to have instructed your solicitor correctly.

Since your existing mortgage was completing on the 1st of October (Monday), the funds were drawn down from your new lender on 28 Sep (Friday).

It was your decision on what you were planning to do and you do not have to swicth mortgage on the same day as the completion of the fix. You could have delayed the whole process by a week.

Since the money was drawn down by your solicitor, you will have to pay the interest. If you did not instruct your solicitor to draw down (or infact not to draw down) the money one working day prior to the switch. By default they would do it a day prior to completion/swicthing.

I know this is not the answer you would be looking for but I am not sure you will get anywhere with your complaint on this basis as you have not thought about this before going ahead.

beefturnmail

Thanks for the reply -

Not being funny, but I did think about this - The only thing I instructed the solicitor to do was to complete on Monday 1st October.

As it happened completion was delayed until the 2nd October. At no point did I instruct the solicitor to draw down the money at any particular time and it was not made clear to me that they would draw it down 1 working day before completion.

How is this any different to when I bought the house? - All I did then was instruct my solictor to complete on a particular day - I didn't say anything about when I wanted the money drawn down - and the money was drawn down on the day of completion and I was only charged interest from the day of completion - not before

Do I have a valid complaint with the solicitor then for not keeping me informed properly of what was going to happen?

Thrugelmir

beefturnmail wrote: »

The only thing I instructed the solicitor to do was to complete on Monday 1st October.

Your solicitor therefore had to draw the funds down the previous week.

If you had remortgaged on a Friday it would have saved you money.

Given you made the instruction. Then you've no one to complain at.

beefturnmail

I instructed the solicitor to complete on the Monday 1st October - I did not instruct the funds to be drawn down the week before.

Given that the Solicitor is supposed to act in my best interests is it unreasonable to expect the solicitor to tell me that completing on a Monday would mean that the funds would be drawn down the week before and therefore I would pay additional interest? Silly me, that would be expecting a solicitor to provide a good level of service. Nice little earner for them too, banking the 4 days interest.

And it still doesn't answer the question - why is it any different to when I bought the house when the funds were drawn down on the day of completion?

Thrugelmir

beefturnmail wrote: »

I instructed the solicitor to complete on the Monday 1st October - I did not instruct the funds to be drawn down the week before.

Your solicitors did the job you employed them to do following the correct due process. So I think that you are missing the point. As obviously have no idea as to what's involved.

Suggest you chalk this up to experience.

dippy

beef, it's standard practice for solicitors to draw down funds one working day before completion to ensure that your seller can be paid on time. If there was a delay with the bank's transfer process, you wouldn't be able to complete, would be in breach of contract and your seller would be able to charge you interest at a higher rate.

Think about the four days interest as an insurance payment

beefturnmail

Can anyone answer my last question though? - why is it different to when buying a house when the loan is drawn down on the day of completion?

I also don't think the solicitor was acting in my best interests - I spoke to them in the week leading up to the 1st October and there was ample oppurtunity for them to advise that they were going to draw down on the Friday 28th. Omitting to supply information can be as misleading as giving false information.

dippy

beefturnmail wrote: »

Can anyone answer my last question though? - why is it different to when buying a house when the loan is drawn down on the day of completion?

He was acting in your best interest. Some banks leave the transfer to the last minute and if they can't do it on time, you would have to pay penalty interest to the seller.

Thrugelmir

beefturnmail wrote: »

Can anyone answer my last question though? - why is it different to when buying a house when the loan is drawn down on the day of completion?

Not standard practice to do so.

beefturnmail

Thanks all for replies but I think something's been confused - there is no buyer or seller - this is a RE-mortgage. Therefore no penalty interest and no advantage (to me) of drawing down the money before completion.

Just to make sure I'm not going mad - I've re-checked my mortgage statements and documentation from when I bought the house. Completion was on 22nd November 2010. This was also a Monday. My first mortgage statement from my previouse lender shows the advance as being on the Monday 22nd November and I was charged interest from Monday 22nd November, not Friday 19th November. If this is not standard practice, was I then just lucky when buying the house??

I know I'm in danger of labouring the point, but these solictors (not the ones used in my remortgage) http://www.gallowaysonline.co.uk/services/services-conveyancing/services-conveyancing-guide-to-conveyancing state clearly on their website, that draw down is on the day of legal completion (not 1 working day before), so it can't be that 'standard' practice.

Completion of your move

On the day of legal completion, your solicitor will:

• Arrange legal paperwork
• Discharge your mortgage and/or draw-down funds for your new mortgage
• Pay your fees as per the Terms of Agency Agreement you have signed
• Arrange the legal documentation to be signed for the transfer of the property at H M Land Registry and register your ownership
• Arrange your Stamp Duty payment, payable to the Inland Revenue