What Date Do You Aim To Switch Mortgage

robertmckee14

Our current deal ends on August 31st, our monthly mortgage payment comes out on the 5th of the month.

Do we request to switch on the 31st August, 1st September or 5th September?

What date would we request to switch the mortgage and when would our last payment to our current lender be (5th August or 5th September?).

Trying to get things clear in my head!

Rob

fiddling_flower_petals

Switch on 31st August when your current deal ends, any later you will have reverted back to lenders SVR or similar. See terms and conditions of mortgage offer.

InMyDreams

robertmckee14 wrote: »

What date would we request to switch the mortgage and when would our last payment to our current lender be (5th August or 5th September?).

Could be either I suspect. You shouldn't pay on the 5th September, but don't count on it. For example if the switch is delayed for any reason. I was lucky enough to get one of the FD fixes but due to their fab rates they were so busy that things got held up in a queue for a couple of days, so I did end up paying a couple of days of SVR. Worth it in the long run though. The other reason you may end up paying is that your current lender may have already instructed the payment before redemption has actually taken place and it will be too late to stop it.

Either way, if you end up paying too much, you will then have to wait to be refunded. PITA but you won't end up paying more than you should. Just watch the cash flow that month!

robertmckee14

Ok, so aim for 31st August, i wasnt sure if i switched on the last day of the deal i would be hit by a huge early repayment charge as im still within the discount period.

Yes, im planning to have abit of a cushion that month in case something happens.

Thanks

InMyDreams

robertmckee14 wrote: »

i wasnt sure if i switched on the last day of the deal i would be hit by a huge early repayment charge as im still within the discount period.

Tell your new lender that the redemption should not include any early repayment charge. If the redemption figure is very different from the one you are telling them (eg because it has had a charge added) then they should check it with you. They did this to me because the figure I estimated to them was only the capital. It did not include the months worth of interest accrued (as I also redeemed close to my payment date) or the exit fee. Unfortunately they insisted on taking this from my current account as it meant the total amount was more than they had agreed to, even though most of the extra (the interest) had already been paid by me direct in the regular payment to my old lender which then had to be refunded.

You can always ask your lender for two redemption figures, one on the 31st and one on the 1st just to reassure you. I did this because I was worried about the same thing.

robertmckee14

So if my last payment is on the 5th August and i switch on the 1st September the outstanding capital plus 1 months interest will need to be transferred by the solicitor?

I will call this afternoon and request redemption statements for both dates to see where we stand.

Thanks

InMyDreams

robertmckee14 wrote: »

So if my last payment is on the 5th August and i switch on the 1st September the outstanding capital plus 1 months interest will need to be transferred by the solicitor?

Roughly, yes, I think that's right. Plus the exit fee. [Edit, hang on, solicitor? I think our money was transferred direct from lender to lender. Ours was a remortgage, not a purchase.]

robertmckee14 wrote: »

I will call this afternoon and request redemption statements for both dates to see where we stand.

You won't be able to get redemption figures now for August/September. I think all lenders vary but mine would only give a redemption figure for no more than 7 days in advance. You'd have to do it right at the end of the remortgage procedure. It'll be the very last thing to get in place before money is transferred.

robertmckee14

Once the intended last payment is taken (5th August) is it better to cancel the DD incase the switch date runs late and overlaps with our normal payment date so that the current lender doesnt take another payment from us which isnt taken into account in the redemption statement and then needs to be refunded etc.

robertmckee14

InMyDreams wrote: »

You won't be able to get redemption figures now for August/September. I think all lenders vary but mine would only give a redemption figure for no more than 7 days in advance. You'd have to do it right at the end of the remortgage procedure. It'll be the very last thing to get in place before money is transferred.

Oh right ok, ive already ordered a statement of my account to be sent to me so i can estimate the amount we need to borrow for our new lender. That should do for now then.

InMyDreams

robertmckee14 wrote: »

Once the intended last payment is taken (5th August) is it better to cancel the DD incase the switch date runs late and overlaps with our normal payment date so that the current lender doesnt take another payment from us which isnt taken into account in the redemption statement and then needs to be refunded etc.

The redemption figure won't take into account any money that hasn't yet been paid, whether it's due to be or not. Cancelling the dd won't make any difference to it. My payment date was the 1st, I wanted to redeem on the 2nd, which happened to be *after* my payment had been made, but the Abbey would still not knock this off the redemption figure as that had to be issued before they had actually received the payment. So I paid it and my new lender had to pay it again to redeem the mortgage, even though by that time I had already paid it.

Personally I wouldn't cancel the dd, but others may disagree. If things take longer than expected then you may end up having to pay it manually anyway. Also, if the lenders did **** up, I'd rather have the inconvenience of being out of pocket for a few weeks than have the inconvenience of having to sort out an (albeit wrongfully) damaged credit rating for being in mortgage arrears when I wasn't. Not worth the risk of hassle for me, but others may feel it's more hassle having to be refunded.

robertmckee14

was it difficult to get a refund of the extra payment from your previous lender?