Switching Mortgage - Monthly Timing

Sierra_Hotel_1

Hi all,

I'm in the process of changing mortgage. Simply a case of the old deal expiring, and my friendly broker sorting me out a new one.

However every time I switch lender (interesting that it's every 2 years Mr. Broker), I end up having to effectively pay twice in a month. e.g. Like now I'm paying on the 28th to existing lender. New lender will take their first payment the 7th, and then the 1st moving forward.

This means, 3 mortgage payments in two months (or 2 payments in 1 month). I'm sure like many others, our finances are finely balanced on a monthly basis, and making two full mortgage payments in a month makes things extremely difficult, temporarily wiping out any savings, or worse, concerning other financial commitments.

Is there any way around this?

Many thanks,

Richard

Thrugelmir

Why is new lender taking money on the 7th?

Elfbert

I've just changed mortgage providers, and they asked me which day of the month I would like to pay...I kept it the same as my previous mortgage, so I don't really understand why you can't do the same?

I've always been asked which day I wanted payments to be taken on, never been told by the provider. After all, they want to be sure they'll get the money!

pjread

worst case, remortgage for settlement balance on old mortgage plus a month's payment if it's that tight? But I can't see why you can't keep date the same, have you asked your broker?

getmore4less

Just borrow a bit more each time to cover the cash flow issues.

Multiple payments should have resulted in the amount owing going down a bit.

Why do you keep getting 2 years deals? bet there are fees each time.

tizerbelle

As its forseeable that this could happen why not just put an amount equivalent to 5% of your monthly mortgage payment into a savings account each month (not to be used for anything else).

Then when it comes time to renew you have that extra monthly payment sat there waiting for you.

aylesburygirl

What date is the remortgage due to go through, ie when does your early repayment charge end?

Sierra_Hotel_1

Thanks for the replies everyone. Frankly I can't understand why this isn't a common problem, because I keep hitting it, with different lenders each time.

Thrugelmir wrote: »

Why is new lender taking money on the 7th?

So - I pay my previous lender on the 28th of each month. From the conveyancer: "[FONT=&quot]first mortgage payment due to Virgin Money would be due on the 7th of the month following the completion of the remortgage[/FONT]".

If my last previous lender payment is on the 28th March (for example) - surely I'd have to complete in April - and if this means paying new lender on 7th April - bang that's two payments in little over a week.

In theory I suppose I could complete AFTER the 7th April - but then who do I owe for the interest for the capital in the intervening period?! I'm not certain I can just stop paying my previous lender, and leave my mortgage in limbo so that my new lender can take over the debt at a convenient time to me?!

Sierra_Hotel_1

pjread wrote: »

worst case, remortgage for settlement balance on old mortgage plus a month's payment if it's that tight? But I can't see why you can't keep date the same, have you asked your broker?

That's an idea, I'll consider it in future - if I can't rule the repayment dates to suit me.

But as a general point to everyone suggesting settling on repayment dates of my choosing, I distinctly remember last time around, when I was told that the new lender takes a full (or practically full) mortgage payment within something like 7-10 days of completion.

Because of the timing issue with when you've made the last payment to the previous lender - this often means 2 payments in relatively quick succession.

Sierra_Hotel_1

getmore4less wrote: »

Just borrow a bit more each time to cover the cash flow issues.

Multiple payments should have resulted in the amount owing going down a bit.

Why do you keep getting 2 years deals? bet there are fees each time.

Indeed there are fees - another of my bug-bears. But speaking of fees, of course Mr. Broker gets commission each time he arranges a deal. Would he rather have commission every 2 years, or every 3-5?!

Now I could start insisting on longer deals, but invariably he advises against them for x y and z. Him being the 'expert' and me indubitably not, I'm not inclined to argue against him.

Frankly I'm tempted to either ditch the broker, and arrange long-term deals myself, or go against his typical advice and ask him to arrange longer ones.

I mean it's not just the fees and mortgage timing issues every 2 years - it's providing 473 pieces of ID / statements / pay slips, filling out questionaires for conveyancers, taking time off to host surveyors so they can value your home, etc etc.

Sierra_Hotel_1

tizerbelle wrote: »

As its forseeable that this could happen why not just put an amount equivalent to 5% of your monthly mortgage payment into a savings account each month (not to be used for anything else).

Then when it comes time to renew you have that extra monthly payment sat there waiting for you.

That's insanely wise, but naturally I'd rather just avoid the mortgage payment clash altogether - there are many things I'd like to save £1,000 for, and ideally mortgage timing issues would not be one of them!