mortgage payments

silky1873

hi there, 1st post be gentle

just remortgaged through halifax and was wanting a bit of info re payments etc

bit of back ground, mortgage done through broker, and requested payment date of 1st of each month as per our previous mortgage, mortgage was only completed on 28th april.. and paying £489 a month

i was expecting the 1st payment would be either the 28th may or the 1st june at a larger payment than the regular payment to take into account the additional days so was expecting maybe £520 or there abouts

got a letter in from halifax stating they will be taking out £509 on 11th may and then my normal payments of £489 will start on 1st june . they are saying this is right ,

my previous mortgage was with santander, this also was completed in the last week of the month as well, and my first payment was took out 5 weeks later with a larger 1st payment so i was expecting the same

can anyone advise if this is correct as tbh i dont trust the info i got from halifax

thanks

Contemptuous

Yes, that is correct. I believe all lenders under the LBG umbrella work in the same way - I imagine various lenders do things differently.

ETA: why would you not trust what Halifax have told you? What exactly is it you find suspicious? Is the problem that you won't have the money available to make the payment on 11th?

silky1873

no the moneys there to pay it, got money in the bank but there are asking me to pay nearly £1000 over 2 payments over the space of 1 month 3 days for the mortgage. where as i believe the 1st payment should be due 28th may / 1st june time and be a total sufficient to cover the amount of days the mortgage will have been running for , the same as it would for any HP / loan agreement i have had..

my previous mortgage 2 yrs ago with santander was complete on 23rd jan 2013 , i didnt start paying until the 1st march and paid around 25% on top of my normal monthly payment to allow for the additional 8 days then reverted to the normal payment

They are saying because i wanted the payments to start on the 1st of the month then i should have been paying the mortgage from 1st of may, but because of the time scale and the bank holiday then it will be the 11th may for 1st payment, i've never heard of a mortgage you literally need to make a payment before the inks dry

the reason im doubting this a bit is because the mortgage advisor on the phone couldnt tell me why with any reasonable confidence why the payment was on the 11th may as they kept stuttering and struggling to answer with any real confidence before eventually passing me up to the next level where they were much the same , the the advisor in the branch of BofS told me they couldnt advise us either as they werent the halifax even though they offer halifax mortgages.. just seems a bit off tbh

xHannahx

The 11th may I suspect will be 10 working days after completion.
They work that you must have a payment in the calendar month of May as first payment and each calendar month thereafter.
You completed in April so the first payment is due in May. The 11th may will most likely be the closest date to your desired date of the 1st of each month they could get.

Contemptuous

I don't know why your broker didn't explain it to you. They would be aware of how Halifax deal with first payments.

To my knowledge, it's been the case for several years that, if you complete towards the end of the month, the first monthly payment is take around 10 days later. The mortgage adviser you spoke to probably wasn't aware *why* Halifax do this - I'd imagine it's a business decision. Other lenders do it exactly the same way, so I reiterate, it IS correct.

gharrower

the sooner you pay the sooner its paid off.

wannabeprudent

I thought interest was charged in arrears is why is OP first payment so large for a few days interest?

kingstreet

Some lenders collect in arrears (mostly clearing banks) while most
building societies and former building societies collect in advance.

Halifax issues the "Information About Your Mortgage" guide with its mortgage offer and it covers the first payment situation in there. The letter follows completion to confirm actual dates and amounts.

With the likes of Halifax, your last payment will be a month before the last payment on a mortgage with, for example HSBC.

wannabeprudent

Thanks Kingstreet I didn't realise there were different ways of charging interest. A useful fact to know.

If remortgaging from a current or former BS do you get a rebate on the interest paid in advance say if you redeem on the 7th but interest paid up until the 31st?

kingstreet

The redemption figure supplied to solicitor in advance of completion would be higher or lower as a consequence of how interest is charged/paid and when in the month.

silky1873

thanks for all the help guys, if it had been explained to me clearer at the time , it probably wouldnt have felt a bit odd when the letter came through the door ..