Trying to understand closing date in line with first mortgage payment.

Perfect1676

I’m a first time buyer trying to decide when I should close to make my first mortgage payment work.

I am confused with the dates for the first and second payment and would appreciate any guidance.

The advisor could only tell me that the first payment usually comes out after 4 weeks but I wonder if that means I will have 2 payments.

The offer letter states that the following (points a & b below): a) "When your monthly payments are due: Under our agreement, your monthly payment will always fall due on the first of each month. You can choose to make your monthly payments on any day up to the 28th of each month, but this will not change the contractual due date" b) "This illustration assumes that the mortgage will start on 1 February 2024. You will need to make an initial payment including interest charged in the month of completion and the first full monthly.

When the Nationwide mortgage advisor asked for the preferred date of payments, I provided the 3rd of each month, but am wondering whether to change this to the 1st of each month so that I can come out 1st April. I’m working towards completing on 29th February.

Thanks in advance!

kingstreet

Nationwide, being a building society collects in advance, so your first payment will go out in mid-March and it will be made up of of a normal month's payment and interest from the completion date to the end of that month. Therefore, if you complete on 29 Feb, the first payment will be a normal month only as there will be no accrued interest.

Your first regular payment will be on 3 April.

Perfect1676

kingstreet said:

Nationwide, being a building society collects in advance, so your first payment will go out in mid-March and it will be made up of of a normal month's payment and interest from the completion date to the end of that month. Therefore, if you complete on 29 Feb, the first payment will be a normal month only as there will be no accrued interest.

Your first regular payment will be on 3 April.

Thanks so much for this! I have been going around in circles. 
I've just heard back from my solicitor and it seems there may be a delay which means I will likely not complete until mid March which I suppose will bring my payment to the 3rd in any case + the interest from the date of completion. 
If I understand you correctly, this means it will coincide with the 3rd. I am not certain why Nationwide advised that first payment will go out in 4 weeks from completing...I was hoping for the normal payment and interest to come out at my preferred date which I may change to the 1st. 

kingstreet

Here's what's on the Nationwide intermediary site, FYI;-

First payment and how interest will be calculated

Once your clients’ application is completed, they’ll receive a First Payment Notification in writing within 7 working days. This is to inform them of their first mortgage payment and when we’ll take payment from their account.

Your clients' first payment can be higher than their normal monthly payment. It’ll include interest from the date we released the funds to the end of that month. Plus their normal monthly payment for the following month.

For example if your client moves in on the 12th of May, their first mortgage payment in June will include interest for 12-31st of May. As well as the standard mortgage payment for June.

theartfullodger

Strange to say but different lenders (banks, building societies, specialists etc etc etc ect ) have different rules and procedures on such matters.  Perhaps discuss with Nationwide and/or your mortgage broker? 

Perfect1676

kingstreet said:

Here's what's on the Nationwide intermediary site, FYI;-

First payment and how interest will be calculated

Once your clients’ application is completed, they’ll receive a First Payment Notification in writing within 7 working days. This is to inform them of their first mortgage payment and when we’ll take payment from their account.

Your clients' first payment can be higher than their normal monthly payment. It’ll include interest from the date we released the funds to the end of that month. Plus their normal monthly payment for the following month.

For example if your client moves in on the 12th of May, their first mortgage payment in June will include interest for 12-31st of May. As well as the standard mortgage payment for June.

Thanks again. Very helpful!

Perfect1676

theartfullodger said:

Strange to say but different lenders (banks, building societies, specialists etc etc etc ect ) have different rules and procedures on such matters.  Perhaps discuss with Nationwide and/or your mortgage broker? 

Thank you! You make a good point.  I've spoke with both and have found the information provided her to be of more assistance.