Mortgage redemption query 29 November 2018 at 6:18PM in Mortgages & endowments 6 replies 657 views

helejenkins1

I didn’t really know how to title the thread so sorry if it doesn’t really come across as expected.

I am completing on my new house next Thursday. I have been to the solicitors today to sign the last few bits and pieces and he showed us our mortgage redemption figure. We are not debating the figure, all as expected but my concern is our mortgage payment goes out on the 1st of the month so will be taken Monday due to the weekend. Will this payment be returned or not taken?? My solicitor said not to pay it which I wouldn’t do as our new mortgage is with the same provider so don’t want to upset them.

Does anyone have any experience of the same situation?

Thrugelmir

If you've exchanged contracts there'll be no harm if you cancel the direct debit. As the redemption figure for the mortgage assumes this payment not to have been made. You'll be refunded the money in due course even if it is made.

Corrie85

They will take the payment, but on the same day they will get the redemption funds, so you will in effect overpay on your old mortgage. Your old lender will refund you after you complete. (Call them after completion or they will take their sweet time.)

If you cancel the direct debit and there is an unexpected issue and you don't end up completing on Monday then you may be in bother. Depends on how much your trust your solicitor.

LRmortgage

They will refund it. Usually takes a week or two for them to do so.

Don’t cancel direct debit

kingstreet

Here's the bones of an email sent to a client a few days ago along the same lines;-

"Here are the scenarios. Please choose the one you feel most comfortable with. The 1st December payment will not be taken into account in your redemption statement for the close of your existing mortgage.

Leave the DDM in place

If you do this, the payment will go out of your account on 1st and if you completed on 30th November, the payment will be refunded back to your account after a few days. If you don't complete on 30th November, you don't have to worry about making sure the payment is made.

Cancel the DDM

If you do this, the payment won't go out provided you do it at least three working days before the due date. If you complete on 30th November, all will be fine. If you don't complete, you MUST call Halifax (on 30th) and make the payment by card ASAP to avoid an arrears marker being added to your credit file which will cause you credit issues for several years.

Neither way is perfect, but careful management is needed whichever option you select."

obay

KMC took our payment, and after a week refunded us fully to our card (today).

I'd say just let it run if I am being honest, whatever happens, you're going to get:

a) a better rate when you complete
b) a bonus a few days after you complete back into your account. (i don't know why because I had already paid for the month - just feels nice when it came back).

minimike2

Thrugelmir wrote: »

If you've exchanged contracts there'll be no harm if you cancel the direct debit. As the redemption figure for the mortgage assumes this payment not to have been made. You'll be refunded the money in due course even if it is made.

I would not recommend cancelling the direct debit as an auto-return usually auto-triggers a missed payment on lenders mortgage systems.

Let the payment go out. You will get it back, usually within 10 days.