Redemption figure

Habbo

I am trying to work out if I have messed up somewhere.

Mortgage is coming to an end at the end of this month. Paper mortgage statement said £140,100 left to pay. This is what i stated when applying for remortgage with different lender. They requested a redemption statement which comes out at £139,500. When I look at my online statement it says there is £139,380 left to pay.

Why are there 3 different figures? I asked the new lender to complete on the 1st of next month, should I have asked to complete before the end of this month instead?

Will my final payment be at SVR or at the fixed rate that I was on?

K_S

@habbo If your fix is ending 31 May, mortgage is completing on 01 June, and your usual monthly payment goes out on the 1st, generally speaking what will happen is that your payment will go out on 1st June as normal, at the new SVR rate. The lender will usually then refund that amount or any excess back to you within the next week or two.

£139,500 vs £139,380 - the £120 difference might be down to a redemption fee / exit-fee (payable when the mortgage is redeemed) which can range from £0-£250 or so depending on the lender. If you check your mortgage offer from when you took out the mortgage, it should be shown there, worded something like this -

Habbo said:

I am trying to work out if I have messed up somewhere.

Mortgage is coming to an end at the end of this month. Paper mortgage statement said £140,100 left to pay. This is what i stated when applying for remortgage with different lender. They requested a redemption statement which comes out at £139,500. When I look at my online statement it says there is £139,380 left to pay.

Why are there 3 different figures? I asked the new lender to complete on the 1st of next month, should I have asked to complete before the end of this month instead?

Will my final payment be at SVR or at the fixed rate that I was on?

housebuyer143

Habbo said:

I am trying to work out if I have messed up somewhere.

Mortgage is coming to an end at the end of this month. Paper mortgage statement said £140,100 left to pay. This is what i stated when applying for remortgage with different lender. They requested a redemption statement which comes out at £139,500. When I look at my online statement it says there is £139,380 left to pay.

Why are there 3 different figures? I asked the new lender to complete on the 1st of next month, should I have asked to complete before the end of this month instead?

Will my final payment be at SVR or at the fixed rate that I was on?

The redemption statement only shows you exactly what is owing for the day that you request it.. Interest is added daily and then if you make any payments they have to come off. 

A solicitor will have the redemption statement and it will tell them how much interest to add daily and they will work this out then the total amount due when you have a completion date. Until this is calculated everyday you look the figure will be different.

Habbo

K_S said:

@habbo If your fix is ending 31 May, mortgage is completing on 01 June, and your usual monthly payment goes out on the 1st, generally speaking what will happen is that your payment will go out on 1st June as normal, at the new SVR rate. The lender will usually then refund that amount or any excess back to you within the next week or two.

If the arrears were accrued during the fixed rate period why would I get charged at the SVR?

As long as it gets back to me eventually it's not a problem for me I am only trying to understand the process better for next time.

One of the things I have worried about is getting the dates wrong and causing an ERC. I'm with Accord but can't see a redemption fee on their site or in my documents. I have gone a bit cross eyed looking at all these documents for a month though.

K_S

Habbo said:

K_S said:

@habbo If your fix is ending 31 May, mortgage is completing on 01 June, and your usual monthly payment goes out on the 1st, generally speaking what will happen is that your payment will go out on 1st June as normal, at the new SVR rate. The lender will usually then refund that amount or any excess back to you within the next week or two.

If the arrears were accrued during the fixed rate period why would I get charged at the SVR?

As long as it gets back to me eventually it's not a problem for me I am only trying to understand the process better for next time.

One of the things I have worried about is getting the dates wrong and causing an ERC. I'm with Accord but can't see a redemption fee on their site or in my documents. I have gone a bit cross eyed looking at all these documents for a month though.

@habbo I've no idea why its like that but often that's how it works unfortunately! I always warn my clients pre-completion so they know it might go out and that it will come back. Even for my personal mortgage I always pick 1st as the date and re-mortgage completions are mostly on the 1st and as far as I can remember every old lender has taken out the payment on the 1st and then refunded it soon after. I've never had an Accord mortgage myself so perhaps they do it differently, I don't know.

ERC - As long as you complete (redeem the old mortgage) on the working day after the fix end date, you should be fine. It looks like in your case that will be 1st June.

Redemption fee - this is what I can see on a recent Accord resi illustration I sent out to a client, seems to be £90. Doesn't necessarily mean that it was there for you or it was for the same amount when you took out the mortgage, this is as of this week.