First mortgage payment??

laurajane6486

Hi all,

FTB so please excuse lack of knowledge.

I completed on 28th October. First mortgage payment is going to be 1st December, so just over a month after completion.

Mortgage payments are £632 per month. I was already aware first payment would be higher than this due to extra interest, I believed this extra interest would be calculated from 28th to 31st October as the £632 paid on 1st December would cover the period 1st November to 30th November.

I've had a letter in the post from mortgage lender to say first payment on 1st December will be usual £632 + £478. This £428 states "part interest payment for October so I think I'm right in thinking the interest would be from 28th to 31st October. But £428 seems a lot!! Much more than I was expecting!! I have the money and obviously if this is correct I have no issues with paying it. But it just seems so much for 3 days interest? Unless I have totally misunderstood how it works?

Any help appreciated,
Laura

ShivasPlace

I would think that it is interest payments for the few days in October PLUS the whole of November

glentoran99

Doesn't sound right no, My first payment was only a few pounds more than usual and I completed 29th September for the first payment in November, Wasn't a fee for the mortgage or something was there?

glentoran99

ShivasPlace wrote: »

I would think that it is interest payments for the few days in October PLUS the whole of November

the £632 should be November though

steampowered

Does the payment for October include part of the principal on the mortgage, as well as interest?

Mortgage_Moog

It sounds right to me. I moved in on the 28th and my monthly payments were due on the 1st of each month. I didn't pay anything for 5 weeks then paid about 50% more than I usually would. I don't know how they work it all out but it sounds about the same as what happened to me.

lee111s

It depends if the lender collects in arrears or advance.

It sounds right to me though, as you need to pay for the interest from the day you move in until the first payment.

saajan_12

lee111s wrote: »

It depends if the lender collects in arrears or advance.

It sounds right to me though, as you need to pay for the interest from the day you move in until the first payment.

But surely (if I take 3 days to be 10% of a month) then very roughly,
If payments in ADVANCE: On 1 Dec you pay 3 days in Oct + all Nov + all Dec so total 2 months 3 days -> 2*632+63.2 = 1327
If payments in ARREARS: On 1 Dec you pay 3 days in Oct + all Nov so total 1 month 3 days -> 632+63.2 = 695.2

Neither seem very close to 632+478 = 1110..

The best I can figure is that 478 is 75.6% of 632, or about 23 days pro rata. Did the lender send the money to your solicitors early and they are taking that as the start date? Or you should be paying by 20 Nov with payments in Advance but they have a grace period upto the 1st of the next month?

just ideas though, I think your best bet is to contact your lender and ask what period the bill refers to.

lee111s

Call the lender and ask.


You pay interest from the day the funds leave the lenders account, which is usually 3-5 days before completion.

So say 8 days interest for October,, plus the INTEREST ONLY for November, plus Decembers usual payment.

G_M

Best people to ask are the lender.....

adsk

I was very surprised by my recent experience. Payments of £405 per month. Completed on 23 September. First mortgage payment was taken on 1 November. £405.