Why do we owe so much more after changing lenders?

m0rgana

We recently re-mortgaged: the product came with a £995 fee, which we chose to have added on to the mortgage figure, to ensure no sunk costs in the event of not being approved - our plan was to then immediately overpay it. There was also a (small) 'admin fee' imposed by our old lender. I think this was around £175.

I had, therefore, expected the redemption figure on our new mortgage to be the amount we already owed, plus £1170.

Why, then, is our total redemption figure almost £3000 higher than the original sum we re-mortgaged? Please tell me what else I could be missing, as this is concerning given our aim was to save money.

Caz3121

is there an early repayment penalty for your old mortgage or were you on SVR?

m0rgana

Caz3121 wrote: »

is there an early repayment penalty for your old mortgage or were you on SVR?

We were on SVR and had it in writing that there would be nothing to pay beyond that £175 admin fee.

I'm baffled by this and actually don't dare tell my partner because he'll hit the roof if we've been stung by something we weren't aware of. I genuinely don't know what it could be though, because we checked everything. We went through a (free) broker who told us we wouldn't pay anything extra.

Could it somehow be to do with the way the repayment dates worked out?

Also, if MSE can't answer this question, who will be able to - old lender? New one? Broker?

ACG

Do you have a KFI?
It includes all fees the new lender would have charged.

kingstreet

m0rgana wrote: »

Why, then, is our total redemption figure almost £3000 higher than the original sum we re-mortgaged?

Why are you looking at the total redemption figure for the new mortgage? Presumably that would include an early repayment penalty if you paid it off, but you aren't doing that are you?

m0rgana

ACG wrote: »

Do you have a KFI?
It includes all fees the new lender would have charged.

I've just had a look at it now - it sets out the figures we were expected to pay as detailed above.

I think I now know why the figure is higher than what I was expecting: the figure we re-mortgaged would have been the amount owed two months ago (when we started the process) so in my sums I am working from a different figure that includes what we've paid back since then.

I guess I would have expected the figure that is showing now to be lower because it should include what we have since paid the old lender during the re-mortgage process.

Does this mean they owe us the amount that is not accounted for, and should we not have received a cheque by now if so? We completed about 3 weeks ago.

NB I am basing this all on what is on my credit report, which is where I see a running record of payments.

m0rgana

kingstreet wrote: »

Why are you looking at the total redemption figure for the new mortgage? Presumably that would include an early repayment penalty if you paid it off, but you aren't doing that are you?

I'm looking at my credit report which shows everything I owe to all creditors. I assumed this was just the amount remaining on my mortgage and that it would not include things like repayment charges, which I'd need to get from the lender.

SG27

m0rgana wrote: »

I'm looking at my credit report which shows everything I owe to all creditors. I assumed this was just the amount remaining on my mortgage and that it would not include things like repayment charges, which I'd need to get from the lender.

How up to date is it?

ACG

Your credit report might not be 100% accurate. If you have overpaid to the old mortgage company then yes you will get a cheque for the extra.

However your solicitor should have requested a redemption figure.

Also dont forget, say your mortgage payments are £1k a month, depending on how long you have left on your mortgage, its completely possible that very little of that £1k is coming off your balance.

WestonDave

Not sure if it still applies but certain small lenders used to put the interest on the account annually, so you may well have had a balance as at say 1st August, but that would not account for maybe 7 months interest if they add the interest annually on 31st December. If you had a redemption figure then that shouldn't be the issue but worth raising it just in case.

kingstreet

What does the completion statement from the solicitor say?

That is the most reliable means of working out what has come in from the new lender and what has gone out to the old one.

Then, the balance is simply the amount in, plus any added fees.