Reducing amount required for re-mortgage but confused by latest letter from conveyancer

aj9648

Hi

I am currently re-mortgaging my property.  Currently with Atom and as of today £98671 left on mortgage with last payment due in November.  I was successful with getting a nationwide mortgage and decided that I wanted to pay a lump sum of £67,000 to reduce the mortgage further and now have a mortgage offer agreed of £31,000 starting on 1st Dec

Got this letter today which stated the below - but i am so confused by it - any helpers ??  Which lender are they referring to? how do i know what to pay if they dont know the shortfall ??

We write to advise that we have identified a shortfall on your file. Please note, this does not necessarily mean that we are in a position to complete your remortgage, however, we want to make you aware of our Firm’s requirements in respect of payment of a shortfall where the payment is being made to ourselves. We would also like to bring to your attention that will not have an exact shortfall figure until we have set a completion date.

 You can either make this payment direct to your lender or to us.

 Payment to your Lender

If you wish to pay your lender directly please contact them to arrange this. Please advise us once you have made the payment so we can diarise to obtain a new Redemption Figure with this payment taken into account.

singhini

aj9648 said:

Hi

I am currently re-mortgaging my property.  Currently with Atom and as of today £98671 left on mortgage with last payment due in November.  I was successful with getting a nationwide mortgage and decided that I wanted to pay a lump sum of £67,000 to reduce the mortgage further and now have a mortgage offer agreed of £31,000 starting on 1st Dec

Got this letter today which stated the below - but i am so confused by it - any helpers ??  Which lender are they referring to? how do i know what to pay if they dont know the shortfall ??

We write to advise that we have identified a shortfall on your file. Please note, this does not necessarily mean that we are in a position to complete your remortgage, however, we want to make you aware of our Firm’s requirements in respect of payment of a shortfall where the payment is being made to ourselves. We would also like to bring to your attention that will not have an exact shortfall figure until we have set a completion date.

 You can either make this payment direct to your lender or to us.

 Payment to your Lender

If you wish to pay your lender directly please contact them to arrange this. Please advise us once you have made the payment so we can diarise to obtain a new Redemption Figure with this payment taken into account.

Have you actually made this £67,000 payment ------> if not, perhaps their waiting for you to actually make the payment to Atom  (is that the shortfall?). if you have sent it, have you got confirmation its been received and its cleared ?

i have too say if we use your numbers, there is a £671 shortfall

outstanding mortgage £98,671 less £67,000 = £31,671 owing (but new mortgage is £31,000 so its short by £671)

aj9648

Ah ok - i guess  I am going to have a huge penalty on this as I have already paid my full overpayment as well ??

There is still one further payment to make of £812 so should be ok (I think)???!!

MWT

Talk to your conveyancer, I imagine the intention is for your current fixed period to end with Atom so there is no ERC, then to clear the mortgage with the new loan from Nationwide + your £67,000, so you are not paying the £67,000 directly to Atom, you would be sending that to your conveyancer so they have the necessary funds from you and Nationwide to clear the Atom mortgage...

ACG

Could be a few reasons:
1) If you have paid the £67k and are still tied in, there will be an ERC - you would normally send the money to the solicitors and combined with the new mortgage, they would clear the old mortgage once out of the ERC period.
2) Most lenders have a charge to leave the lender - a "deeds release fee" - around £100-200 usually. 
3) There may still be interest to be added. 

But from your last response it sounds like it is probably (1)?

kingstreet

aj9648 said:

Ah ok - i guess  I am going to have a huge penalty on this as I have already paid my full overpayment as well ??

There is still one further payment to make of £812 so should be ok (I think)???!!

A redemption statement has an assumed last payment date. Does it include the above, or not? If not, you need to add it to the sum you hand to the conveyancer.