Remortgaging query

chazzee

Hi,

Quick question - when it comes to a remortgaging application, when you submit a full offer you state how much the existing mortgage is (ie current balance including ERC).

By the time the remortgage comes to complete, the balance of the existing mortgage is going to be lower due to repayments etc. What happens with the difference between what was requested (ie the amount in the KFI and offer documents) and what is paid to the old bank/building society?

For example (these are example figures only) Full Offer in Principle of 100,000 but when it comes to complete the mortgage is say at 98,000 + 500 ERC = 98,500 which leaves a difference of 1,500. what happens to this?

Many thanks.

Thrugelmir

Any surplus funds will be released to your by your solicitor once all liabilities, fees and disbursements are settled.

cbrpaul

Thrugelmir wrote: »

Any surplus funds will be released to your by your solicitor once all liabilities, fees and disbursements are settled.

thats what i was told here when i did this 2 months ago , and was incorrect in my case !!

My solicitor requested a final redemption figure 1 week before remortage date,

He then drew down the amount that was requested, from the new lender to pay off the old lender,

There is no " surplus" !!!!

I ended up borrowing £3000 more as i booked 6 months in advance and didnt know what the final redemtipon figure would be

Thrugelmir

cbrpaul wrote: »

thats what i was told here when i did this 2 months ago , and was incorrect in my case !!

My solicitor requested a final redemption figure 1 week before remortage date,

He then drew down the amount that was requested, from the new lender to pay off the old lender,

There is no " surplus" !!!!

I ended up borrowing £3000 more as i booked 6 months in advance and didnt know what the final redemtipon figure would be

Sounds as if someone got their maths and/or costings wrong.

cbrpaul

Thrugelmir wrote: »

Sounds as if someone got their maths and/or costings wrong.

Not really , as at the time I applied to re-mortgage it was 6 months before the actual redemption date, and that was the amount of redemption at that time and what i had to by law give my new lender,,, and the reason I booked so early was to bag a good rate, as rates did indeed increase 6 months later !! .

My point of my post was just to ensure the OP didn’t get incorrect information, in case they were relying on extra funds being past to them and didn’t get it!!!

chazzee

Many thanks, no I wasn't necessarily expecting extra funds, just wondered how it all gets worked out. I guess that the monthly repayments adjust accordingly to account for the lower figure?

cbrpaul

chazzee wrote: »

Many thanks, no I wasn't necessarily expecting extra funds, just wondered how it all gets worked out. I guess that the monthly repayments adjust accordingly to account for the lower figure?

Funny enough my payments stayed as per original mortgage quote on the original amount requested ,

I can guess that I am now overpaying on payments which for me isn't a bad thing

I am sure one call to them and they would reduce the payments if I asked , but I will leave it and continue to over pay

Leon_W

The amount that is released is that which is on your KFI.


The monthly payment is what it is on your KFI.




When remortgaging I always allow a little slack so that there is slightly more money available to redeem the old mortgage than is needed. Dependent on the time of completion and any extra repayments made by the time completion takes place there may be a surplus. Any surplus is returned by the solicitor to you.


Monthly payments are not "adjusted" and there is no "lower" figure. It is all as per the KFI.

cbrpaul

Leon_W wrote: »

Any surplus is returned by the solicitor to you.


.

Please can you tell why I did not receive the near £3000 surplus on my re-mortgage recently ?


I was told by the lender that the solicitor only draws down from the new lender the exact amount needed to close the old mortgage account, no more and no less , and the loan amount you owe back is adjusted down to what you requested originally.

hampster

You will recieve a refund of the surplus direct from your conveyancer definitely
Cheers

Thrugelmir

cbrpaul wrote: »

I was told by the lender that the solicitor only draws down from the new lender the exact amount needed to close the old mortgage account, no more and no less ,

In that case was the terms on which your lender operated.