Remortgage - figures not adding up

gracie83

Need some help as nothing is making sense!

I applied for my remortgage months ago. It was too early for my current lender to provide me with an exit balance so when I applied for the mortgage I was told to apply for an amount which will cover everything and they will only actually charge for what is required to pay off the existing loan - so I applied for £104900.

Fast forward to mid May - I get a statement and letter from the original lender saying that they have issued a redemption quote to the solicitors. They also gave me a current statement with a balance of £104,683 plus accrued interest of £125 as it was in the middle of a month and early repayments charges of around £130 should I close the mortgage before 30th June.

I got a call a week ago from the solicitors asking for £17.00 to cover interest from June 30th to July 3rd which we paid.

Yesterday (July 3rd) the remortgage was completed and our monthly payment was taken by the original lender. Today I got a letter from my new lender saying my mortgage is £104,900 - which just happens to be the same amount as the 'cover everything' amount I applied for months ago.

I called the original lender to ask what the balance was when the mortgage was closed and he said £104,917. I asked how this was possible when the balance in May was less than that - he just said it was because I had made my monthly payments?! I am worried because it is almost the same amount as the early redemption figure quoted to me in May. Even though the mortgage did not start until July after the early repayment date on 30th June.

The new lender says speak to the old lender, the solicitor will not tell me the figures they were provided by the old lender, the old lender says the figures are correct and they will send me a closing statement in 7-10 working days.

Am I being dense here? From the figures in May the mortgage should be closer to £104500 than £104900!

I know I will just have to wait for the final statement from the original lender but I am really confused!

glosoli

The balance for the new mortgage provider would be £104,900 as this is the amount that was applied for. Should there have been a surplus, this would have been refunded to you by the solicitor. In this case, it wasn't enough, which is why more was required to redeem the mortgage.

In terms of the actual redemption figure - the redemption figure is essentially the current balance, plus any daily interest which has accrued through the month, plus any security release fee's and early repayment charges.

In terms of the figure you obtained in May, is it possible that a repayment had just been taken? So for example, £104,683, which includes the repayment for that month, but not inclusive of the application of interest which accrued in May. You said that by mid may interest had accrued of around £125, so lets say £250 was applied on 1st June. This would have taken the figure to around £104,933. Then you make another mortgage payment, which brought it down again, and then another full months interest would be applied on 01/07/2017, plus obviously the security release fee/early repayment charges, I don't think £104,917 would be too far off the mark to be honest.

Thrugelmir

gracie83 wrote: »

Today I got a letter from my new lender saying my mortgage is £104,900 - which just happens to be the same amount as the 'cover everything' amount I applied for months ago.

That's correct. The amount you applied for will be transferred to the solicitor to redeem the old mortgage.

In a few days you'll receive a proper redemption statement from the solicitor. This will itemise everything in detail. Where the solicitors costs free or did you have to pay for them?

gracie83

Thank you for the replies.

The solicitor was employed by the new lender to convey the mortgage, we have not paid a penny (mortgage was fee free).

I suppose it makes sense if the May 11th balance was low because of a recent payment. Our payment dates were on the 3rd of the month. I suppose I do not think of interest on a daily basis - just end of the month totals and never thought that this was early in the month.

I am interested to see the paperwork from the solicitor and the old lender. The old lender also said we would be getting back the monthly payment we made on the day the mortgage transferred so really confused now as I was sure the mortgage was paid in arrears!

My husband has just told me off for being freaked out about this and not just waiting for the paperwork to come though - do we have a mortgage - yes, are we now financially better off each month than we used to be - yes - stop worrying then!

Thrugelmir

gracie83 wrote: »

The old lender also said we would be getting back the monthly payment we made on the day the mortgage transferred so really confused now as I was sure the mortgage was paid in arrears!

Redemption statement would have assumed that this wasn't paid. Perhaps that why you feel you've overpaid.

gracie83

Got the statement from the solicitors. If we had remortgaged today the mortgage would have been around £104300. All the interest from in the last month had been added to the mortgage. So we will have had a mortgage free month but now have to pay interested on the interest we would have paid off if we had waited an extra day. May put the refund back into the mortgage as we can overpay on this new one.