Mortgage/Bank Charges

Steztheskinhead

Hi
My problem is, when we got our mortgage with the Skipton nearly 20 years ago a payment date of the 7th of each month was the agreed date the skipton would take the mortgage payment but.......I've lost count of the times they've try'd to take the payment early when there's been insufficient funds in our account to cover the payment thus resulting in a £35 penalty charge from the Skipton & a £25 charge from Lloyds TSB for an unpaid direct debit. Are they allowed to deviate from the agreed date? We've got a pretty tight budget having a large family & we need to know that the money is going out of our account on the same date every month.
Thanks in advance

MarkyMarkD

There are a few issues here:

- firstly, if you have an agreed payment date of the 7th of each month, there's no justification in the lender taking the money early UNLESS (and this is a big unless) they actually have agreed that you will pay the money BY the 7th each month, meaning it will be taken early if the 7th falls on a weekend or bank holiday. Assuming that is not the case, they should not be taking the money early and they should compensate you for any charges resulting from them doing so.
- secondly, you need to have money in your current account by close of business on the working day immediately before the 7th, even if the DD goes out on the 7th. So you ALWAYS need the money there by the 6th, and sometimes by the 4th if the 4th is a Friday (or even earlier in the case of bank holidays intervening as well).
thirdly, most (all?) mortgage lenders will let you change the pay date of your mortgage, usually without hassle or charge as long as you don't miss out a month's payment by doing so. (In other words, if you changed from 7th to 31st, you would have to pay twice in one month or you would effectively go into arrears by one month).

I don't imagine it would be difficult to resolve this problem - I think you've made it worse for yourself by choosing a payment date which is so marginal. Far better to allow a few days' leeway to avoid this sort of problem arising.

Hope that helps!

PS Welcome to MSE and hope you enjoy your time here.