Help - first Mortgage payment disaster

[Deleted User]

We’ve just received our mortgage offer which states our first payment could be as much as practically double what our agreed monthly payment is which has come as a bit of a shock and now panic as with all the costs of moving etc we literally wouldn’t have that much spare cash to make the first payment 🥴

now I’m aware that this is based on interest being added to the payment, in the case it would be based on funds being released on 1st of the month so a full month of interest ontop of a monthly payment. Is there a specific day that would mean we could pay minimal interest? For example if we completed at the end of a month the funds would be released approx 5 days prior and therefore only paying 5 days of interest and the monthly payment rather than 30 days of interest? 

My brain in scrambled and the mortgage fella is on his holidays until 15th April.

HELP!

amnblog

Don't panic.

In order to generate an Offer the system has to assume a completion date. The earlier in the month that assumed completion date, the higher the first payment figure.

Why?

Typically the first payment will consist of a standard monthly payment plus interest on the loan from the day of completion until the end of the completion month. Therefore the earlier in the month the mortgage completes, the more the interest due during that month, and the more first payment will be.

We don't know when you will complete, but many people complete late in the month for this and other reasons. If that were the case with you, your initial payment would be much lower.

kingstreet

Tell your solicitor you want to minimise/avoid accrued interest and they will ensure you complete at/near to the end of the month.

Edi81

I don’t want to be negative but are you sure you are ready to purchase a property?
I had zero money when I bought a flat and on the day I got the keys found out the water heater was broken and needed a new one. My parents were able to help me out with the couple of grand but properties can be expensive unexpectedly 

HampshireH

Edi81 said:

I don’t want to be negative but are you sure you are ready to purchase a property?
I had zero money when I bought a flat and on the day I got the keys found out the water heater was broken and needed a new one. My parents were able to help me out with the couple of grand but properties can be expensive unexpectedly 

A lot of people wouldn't be able to afford a double payment if they didn't know they needed to

Doesn't mean they aren't ready to buy a property.

The same could be said for buying and relying on parents to help out with a few grand....

But again didn't mean you weren't ready to buy

[Deleted User]

Edi81 said:

I don’t want to be negative but are you sure you are ready to purchase a property?
I had zero money when I bought a flat and on the day I got the keys found out the water heater was broken and needed a new one. My parents were able to help me out with the couple of grand but properties can be expensive unexpectedly 

I mean apart from the fact that myself, husband and 2 young children are in the midst of a blindside no fault eviction from our rented home of 12 years, what amount of the population have a pile of money left immediately after buying a property? We both work but our wages for the time of completion will be tied up paying removal fees, rent, bills and all the other completely normal things people have to pay out when moving so it’s not that farfetched to say we haven’t got a spare £450 ontop of everything else we have to pay out. Completely unhelpful comment, thank you 😊

ian1246

[Deleted User] said:

Edi81 said:

I don’t want to be negative but are you sure you are ready to purchase a property?
I had zero money when I bought a flat and on the day I got the keys found out the water heater was broken and needed a new one. My parents were able to help me out with the couple of grand but properties can be expensive unexpectedly 

I mean apart from the fact that myself, husband and 2 young children are in the midst of a blindside no fault eviction from our rented home of 12 years, what amount of the population have a pile of money left immediately after buying a property? We both work but our wages for the time of completion will be tied up paying removal fees, rent, bills and all the other completely normal things people have to pay out when moving so it’s not that farfetched to say we haven’t got a spare £450 ontop of everything else we have to pay out. Completely unhelpful comment, thank you 😊

I think your missing the point the poster was making. £450 is small change when moving into a new house who's faults/issues you may not know about until you've moved in - if your going to be unable to find that money, how are you going to handle the unexpected? 

I offered on a lovely semi detached house in the summer. Moved in on 01st December - only shortly after to discover a large wet patch spreading the whole length of the house. Turned out the overlap between the tiles was insufficient to keep rain out and the felt, which was now failing, had stopped leaks up to this point. Result? £9000 to strip the roof, re-felt & re-tile.

One of the pipes in the bathroom is also very slightly leaking & the stop tap is seized - so I need to arrange for a plumber to come & fix the issue - probably another couple of hundred £££.

Neither of those problems were anticipated or budgeted for. Even the nicest looking homes can have issues - Home ownership can be expensive.

If there is anyway you can build up some spare funds - cutting back on things, overtime, doing some if the removals yourself - absolutely do it. The odds are you might need some spare capital. Hopefully you won't- but just be careful...

ACG

HampshireH said:

Edi81 said:

I don’t want to be negative but are you sure you are ready to purchase a property?
I had zero money when I bought a flat and on the day I got the keys found out the water heater was broken and needed a new one. My parents were able to help me out with the couple of grand but properties can be expensive unexpectedly 

A lot of people wouldn't be able to afford a double payment if they didn't know they needed to

I do not disagree with you, but if they have the offer now, then chances are they will not be completing until maybe June time. Which would mean no payment until July, possibly even august. Thats 3-4 months notice. I am not saying they should be able to find it, just pointing out thats its not a weeks notice, its a good few months. 

I can not add anything that the other brokers have not covered off, complete towards the back end of the month and you should be fine, although it might be worth checking where that cut off is. I have known some lenders to need completion by around the 23rd otherwise that payment is even higher still.