Mortgage Overpayment Withdrawal and Additional Monthly Charge !?

dajohnston10

Hi hopefully somebody could explain this to me !!!!

My situation is :-
I had a mortgage which was "ringfenced" and was with the Cheshire Building Scoiety who have now been taken over by Nationwide and subsequently transfered to the Nationwide It systems..

I am allowed to make overpayments and withdraw these amounts anytime with no penalties. I had overpaid 16K as well as paying the scheduled expected mortgage each month.
Due to personal circumstances i have taken the overpayment of 16k out of the mortgage but my mortgage payments have now INCREASED by 150 per month

Wonder if anyone out there has a similar experience and if you know if this is correct or not...

Ay help appreciated

Thanks

Dave

kingstreet

You have more money to pay back in the same amount of time, so the monthly payment would increase to reflect that?

When you make an overpayment you normally tell the lender you want to reduce the future monthly payments, or the mortgage term.

If choosing the latter, a later re-borrow would mean the shorter mortgage term was the period in which the higher amount would have to be repaid.

I suggest you check with your lender.

TBagpuss

If you have drawn back £16,000 you have effectively borrowed an extra £16,000 so you will be paying interest on that.

Do you know what instructions you gave about the previous overpayments and how they were applied - I think Nationwide offers the option of either reducing the term of the mortgage or the amount of the basic payments, so if you opted to reduce the term it may be that you are now supposed to pa back he whole mortgage in a shorter space of time than when you originally took it out.

How long do you have left on your mortgage?