Warning - Woolwich Mortgage Direct Debits

mattyd_2

Recently completed a re-mortage to The Woolwich. The Direct Debit was setup by them for the 16th of each month. Called them up to change this to the 1st of the month and they said they could not do it, they said all their Direct Debits were setup for the 16th and they could not change it. Expressed my feelings about this as it was never pointed out to me and the fact they are one of the Big Four banks and they can only do one direct debit date. They weren't for budging and said i could not take the complaint any higher. The only thing i could do is cancel the direct debit and setup standing order with my own bank.

There's nothing like looking after your customers!!!

dunstonh

With direct debit dates being more expensive around end/beginning of the month, increasingly providers are selecting limited dates (often only one) day in the month when they do the direct debit in an attempt to reduce costs.

chivers1977

it is in the terms and conditions book you would have received.........

alfiesmum

We recently changed to a Woolwich mortgage, and I couldn't have found them more helpful. Standing Order, or direct debit, doesn't matter which it is, the money leaves your account, and goes to them. They offered to help me set it up, gave me every bit of information I needed, and I've not had a problem with it so far...MIght be worth thinking about if it's desperately important that you pay on a certain day of the month?

Cheesedoodles

Hi,

Really sorry for bringing up such an old topic, but it's very relevant to me.

We just completed on the mortgage and I received the first payment notice from Woolwich today.

We completed on the 4th December and the statement looks something like this:

Regular monthly Payment: £500
Part interest for January: £450
Total first payment due 16th January: £950
Regular payments to be collected on the 16th of every month: £500

The "problem" i have is the first large monthly payment! I would rather start paying on the 1st of every month starting with 1st January. This means that our first payment will be £500 (or slightly less since we completed 5th december) instead of £950. This is a big sum, in particular now that xmas is over us!! (Please understand that we can AFFORD the £950, but since its xmas that £450 would be nice to have for other things)

I phoned Woolwich and they said I could set up a standing order and then cancel the direct debit.

So my question to them was: "If I set up a standing order for the 1st January for £500, can I then cancel the direct debit and everything will be ok?". The woman on the other end said "Yes, that will be fine".

HOWEVER, I know what banks are like and since this is my first payment I don't want things to get screwed up.

Has anyone else had this issue? Would doing what I said above work, or will they still try to take the £900 from me on the 16 January?

noxon

Have you mistyped? Surely the £450 is the payment due for the period 4th-31st December and not a part payment for January?

You won't be making a payment in December so you will need to make sure that Woolwich receive the £450 in January in addition to the £500 regular payment for the month.

Cheesedoodles

Nope, not mistype. It says "Part payment for January interest". Actually, I've done the calculations and that payment matches what I would have to pay from 5th December to 31 December.

However, I might just leave the Direct Debit in place and pay the £950. The mortgage comes out of a separate bills account anyway so I'll just transfer the money to my bills account on the 1st of the month and leave the DD in place for the 16th.

It would be nice to have that "extra" £450 for xmas, but I'm not risking the bank suddenly taking more money from me than they should!! They have enough as it is.

clearing_out_my_pockets

When you apply for your mortgage, they do tell you that the first payment will be higher due to interest between completion and your first payment. The estimated interest amount should be on your illustration...?

Cheesedoodles

Yes, I am aware of the reasons behind why the first payment is bigger.

However, I was wondering if it was possible to reduce the first payment, by paying it earlier. I completed on the 5th December and the first payment is on the 16th January. That's 1 1/2 months between the first payment and completion date!

Since I get paid on the 26th of the month I would have preferred to start paying the mortgage back on the 1st January, thus making the first payment £500 instead of £950. This would give me £450 "extra" to play with over Christmas. And before you say anything, I know that i don't get £450 "for free". I am just shifting things around.

This is only a minor inconvenience and I thought perhaps I could change it, but it might be wise to leave it as it is to avoid complications at the start of the mortgage.

Thrugelmir

mattyd wrote: »

Recently completed a re-mortage to The Woolwich. The Direct Debit was setup by them for the 16th of each month. Called them up to change this to the 1st of the month and they said they could not do it, they said all their Direct Debits were setup for the 16th and they could not change it. Expressed my feelings about this as it was never pointed out to me and the fact they are one of the Big Four banks and they can only do one direct debit date. They weren't for budging and said i could not take the complaint any higher. The only thing i could do is cancel the direct debit and setup standing order with my own bank.

There's nothing like looking after your customers!!!

Very easy to set up a standing order! So no need to make a fuss. Paying by standing order makes it easy to overpay the mortgage, if your allows you to do so.

If Woolwich calculates interest on a daily basis. Then paying the money earlier than the 16th will save you money (interest) in the longer term.

The Woolwich has a good reason for choosing the 16th.

Cheesedoodles

Thrugelmir wrote: »

Very easy to set up a standing order! So no need to make a fuss. Paying by standing order makes it easy to overpay the mortgage, if your allows you to do so.

If Woolwich calculates interest on a daily basis. Then paying the money earlier than the 16th will save you money (interest) in the longer term.

The Woolwich has a good reason for choosing the 16th.

I'm not disputing the fact it's easy to set up a standing order. I can do that online.

What I am questioning is what happens if I set up the standing order for the 1st January? Will Woolwich then try to take the first payment of £950 on the 16th January via Direct Debit? And if I have canceled the direct debit, will they then charge me for non-payment?

I know that in theory, it should be easy to resolve this, but in practice these bank system works in peculiar ways and I would like to ensure I'm not starting off the mortgage repayments with a load of problems!