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HELP! got a redemption with a HUGE shortfall. Could someone explain this for me?
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Nickydutch
Posts: 11 Forumite
heeeelp we have a Buy to let/ HMO house and are changing our 'Interest only mortgage' over to a 'repayment morgage'. We changes lenders and just had our Redemption statement with a £5249 shortfall after 2 years. The statement is calling it interest not a penalty what I find strange as I thought we paid the interest (interest only). Can someone explain this to me as i'm not great with mortgages as you might have guessed and this baffles me totally. We took the loan out as 135k and this is now a loan of 139k (?). heeeeeelp its Friday evening and only just seen this and no way I can speak to the bank before Monday and need SOME sleep before then. thanks in advance.
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Were you on a fixed rate deal and wanting to change before the deal ends? There can be big penalties if so.0
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hi there, thanks for your reply. I don't think we were. We had a 2 year contract so sat out the contract and saved some money. It does also does not say penalty but interest due. In a different letter it tells us that we borrowed 135k on our last loan and now get 140k 'disbursement (?). just not sure why the amount is so much higher. The bill of £5249,- seems silly off the interest we should have paid (and have paid).0
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Are you sure you've making the full payment each month?0
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yes we have been paying the amount they asked us to pay £625. Just gone up to £726 or summot due to us coming out of our 2 year deal with a lower rate .0
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Annual interest on the loan?I'm a Forum Ambassador on the housing, mortgages & student money saving boards. I volunteer to help get your forum questions answered and keep the forum running smoothly. Forum Ambassadors are not moderators and don't read every post. If you spot an illegal or inappropriate post then please report it to forumteam@moneysavingexpert.com (it's not part of my role to deal with this). Any views are mine and not the official line of MoneySavingExpert.com.0
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Did you add any fees on to the initial mortgage at the time?0
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What did the year 1 statement say?
have another look at your docs, two years often means mortgage till a fixed date not exactly 2 years.0 -
UPDATE: I have checked the annual statement and it turns out that we took a 139k mortgage out not a 135k to pay for extra's like stamp-duty, solicitor etc. (I just signed on the dotted lines where I was told). We owe the shortfall due to us taking a 135k mortgage out and so have a shortfall. I CANT BELIEVE i was not aware of it being 139k and my man has now been reminded. Thanks goodness as I was going mental. We have the cash ready as we wanted to pay some off anyway and we now have a smaller mortgage without us realising we were doing this. So sorry to waste everybody's time and thank you for helping me as I was in a slight panic in work when I posted this. I do however feel rather smart as I concluded that we must have taken a larger mortgage out then 135k as there was no other option and this WAS the case. I am now a mortgage 'expert' due to me reading up about this A LOT in the space of my work hours. ask me anything......
thanks again 0 -
Moral of the story
There's normally a simple explanation, one just needs to look for itEarly retired - 18th December 2014
If your dreams don't scare you, they're not big enough0 -
haha yup sorry.... whoopsy0
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