Nationwide first payment - double??

tsr_2

Just remortgaged from Abbey to Nationwide interest only fixed for 2 years - completed on Aug 1st.

On Friday received the first payment information, first payment on Sept 1st will be the standard interest (£528) plus an additional £548 for the month of completion.

Speaking to Nationwide this is an additional payment for "residual interest".

I cannot make sense of this payment and was not told about it by our IFA. If it is specific to Nationwide it is a massive extra cost particular for this provider.

Is this normal for a remortgage?

Many thanks for your help

Tim

Katykat

I would also be interested in any info on this as I am about to complete ( possibly 1st sept) with a Nationwide interest only mortgage. Also, the conditions of this 2yr fixed rate state that overpayments may be made at a minimum of £500 pm ( so IFA told me). But surely that should be MAXIMUM £500 pm. Any help please?

PS. Just phoned my IFA, he explained that if exchange was 1st Sept, THAT is the day they start charging interest, so if first payment is 1st OCT, then you are in arrears by one month, so that is why you have to pay 2 payments, as you always have to pay ahead. Sounds reasonable put like that. Perhaps Nationwide didn't explain it well enough.

payless

tsr
Initial interest , as thgis is often known - is mainly the effect of paying in advance - which is common with most ( not all ) lenders including NAtWide & Abbey

Should not be such an issue with a remortgage, as you will have paid in advance already, so in theory the balance swapped includes the initial payment charged to the Abbey account - that said if you (or IFA) not calculated it correctly you could have a cashflow issue

Make sure that you get a closing statement , that all payments to Abbey are accounted for, and the solicitors redemption figure was correct

MortgageGenie

As mentioned by payless it's due to the initial interest, the completion date & your payment date.

The application form reads:

Nationwide_Application_Form wrote:

Direct Debits are usually collected on 1st of the month unless you ask for a different day (2-28). Your first payment is due in the month after you complete your mortgage and will include interest for the month of completion as well as one full monthly payment. After that, payments will be your regular monthly amount.

Yes it's £500 p/m maximum.

Fruit_Gum

Hi, we have a mortgage with Nationwide and I do recall the first payment being double

Joe_Bloggs

Just got a mortgage from Nationwide and the payment was not double.
Interest starts to build up from the date of completion. Nationwide did not immediately process the mortgage after completion as they require up to ten days to do this. They also give ten days notice of payments to be made.

My completion was 21st I received notice of payment on the 2nd of the next month. I requested payments to be made on the first of the month and was surprised to get a bill for 19 days interest plus a full capital payment to be paid on the 12th of the month. I was also charged a normal mortgage payment from my previous lender on the 1st.
This could have created a cash flow problems. I had saved up to remortgage and, in addition, got £1000 back from the free conveyancing solicitor. This was because the capital owed at redemption was £1000 less than the total, at the time of mortgage quotation request. I did not proceed immediately with the quotation as I did not have a fresh P60 that reflected my current earnings.
J_B.