Completion Date Discrepancy

houman1979

Hi,

We did a remortgage recently and just received a welcome letter from the new lender.

The important point is that the completion date (as we set with the solicitor and confirmed on their letter) is different by the completion date mentioned on the lender's letter by 3 days (lender's date is 3 days sooner) and so they informed us that we need to pay interest for these 3 days in the first payment.

I called the lender and they told me that for them the completion date is when they released the funds. However, in my initial mortgage as I remember the funds were released on the date of completion and we did not pay any more interest.

Now, my questions are:
-is this something common and we cannot do anything about it?
-if it is not ok, whose fault is this? Lender or conveyancer? Consider that we did not hire a conveyancer as it was a remortgage and the solicitor was instructed by the lender.
-what can we do if it is their fault? Complaint and then go to FCA?

Thanks

ACG

Most solicitors request the funds a day or 2 in advance of completion taking place. The reason for this is that if there is a problem, they have a day or 2 to rectify it to ensure completion can take place on time - imagine you wanted that money to pay for your kids deposit or for private medical treatment or something (extreme examples but you get the idea).

They conveyancer would be "at fault" if you consider it a fault.

How much is the mortgage? What is the interest rate?
£200k at 2% interest has probably cost you £33 give or take. I realise £33 is £33 but it meant that you would not end up on the lenders SVR due to any unforseen problems.

Around 18 months ago, I did a Mortgage and the lender on the day of completion called up to say we cant release the funds as we do not have a document on file (I had sent this in recorded and it had been signed for, but nobody had applied it to the application nor picked up earlier on that it was not on file). I had to run around and find a "head of" on linked in as I was getting nowhere with the call centre. They released the funds on the Monday (instead of Friday as expected) our customers were in breach of contract technically but thankfully everyone put it down to "one of those things" and let it slide. Had the solicitor ordered the funds in a day or 2 earlier we would have got it all sorted in time.

houman1979

Thank you. So, my understanding is that it is a common practice and I cannot do anything. Total extra interest is less than £100.

Also, I assume that there is no breach of contract here as it was a remortgage. Am I right?

ACG

I would not go as far as to say there is nothing you can do - I do not know the answer to that.

The same goes for a breach of contract, I have no idea. Where do you think the breach is? That is not a sarky comment.

In your contract it will ask what day you want to complete, usually that would be ASAP or a given date. I am not sure if there is anything to say they will or will not request funds a couple of days early. Assuming you were due to complete on the 1st October, I do not think it is unreasonable that they drew down on the funds on the Friday the 28th for example (but that is just my opinion).

If you think it is wrong, you are within your rights to speak to the conveyancer about it.

davidmcn

It's normal to request the funds in advance, because from a practical point of view it's impossible to guarantee that everything can be done within the completion day itself. Some lenders take a view on it and only charge from the "real" completion date, but if not yours then I would regard it as just one of the necessary costs involved in a new mortgage.

houman1979

davidmcn wrote: »

It's normal to request the funds in advance, because from a practical point of view it's impossible to guarantee that everything can be done within the completion day itself. Some lenders take a view on it and only charge from the "real" completion date, but if not yours then I would regard it as just one of the necessary costs involved in a new mortgage.

Thank you. So I see that it is a common practice but it could be abused by some lenders to charge more and so I cannot do anything in this regard?
Honestly, I assume that lender should charge from the completion date and the fact that they release the funds couple of days earlier to do their job properly should not affect me.

davidmcn

houman1979 wrote: »

Thank you. So I see that it is a common practice but it could be abused by some lenders to charge more and so I cannot do anything in this regard?
Honestly, I assume that lender should charge from the completion date and the fact that they release the funds couple of days earlier to do their job properly should not affect me.

You assume wrongly, and I've never seen it being abused by lenders.

houman1979

davidmcn wrote: »

You assume wrongly, and I've never seen it being abused by lenders.

Can I ask why I assume wrongly?

I set a completion date and it is not my job to make sure that it is completed on that date. I even do not know about the formalities. But suddenly I have to pay some interests as the solicitors wants to avoid any issue (for himself) and the lender does not take the set completion date and charge me a couple of days earlier!

I assume that the solicitor could have at least informed me about this matter and so I did not complete on a Monday and paid one day extra interest instead of 3 days!

If it is not an abuse, please define it!

ACG

The solicitors fill out a Certificate of Title (CoT) which has a completion date on. The lender acts on that.
IF there is a fault anywhere, it is with the solicitor not the lender.

I do not see an abuse as the lender are not the ones instigating the completion date and the solicitor has nothing to gain by doing it other than if there is a problem they have a fighting chance of rectifying it on time - the funds would sit in a "client account" which usually does not accrue interest.

davidmcn

houman1979 wrote: »

But suddenly I have to pay some interests as the solicitors wants to avoid any issue (for himself)

And for yourself, and everyone else involved. Bank transfers don't happen instantaneously, so if the funds were requested to arrive on the completion date, it might not be possible to complete on that date depending on the time they actually turn up. In which case you'd instead be paying the additional interest to your old lender because the redemption of their account would be happening later than planned.

When you bought your house, I presume your solicitor would have had at least some of the money (if not all) in their hands prior to the completion day? Same principle for remortgages.

dunstonh

Thank you. So I see that it is a common practice but it could be abused by some lenders to charge more and so I cannot do anything in this regard?

It is not for you to decide if a term can be abused by a lender or not. It is the FOS and FCA that decide that along with the courts.

As it happens, it cant be abused as its the solicitor that requests the money. The solicitor acts for you. So, by default, you requested the money early.

Honestly, I assume that lender should charge from the completion date and the fact that they release the funds couple of days earlier to do their job properly should not affect me.

The minute the money leaves the bank, they are lending it and you are subject to interest charged. The added days are a safety mechanism to prevent you finding yourself without a home if you had left it to the very day and payment failed on the day of the house move.

Which would you prefer?