2nd mortgage repay
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sqster123
Posts: 2 Newbie
Hi
I took out a second mortgage a couple of years ago for some refurbishments to the house.
I will be in a position soon to repay that off in full as it was quite a high interest rate.
Am I right in thinking that the settlement figure is the ‘amount’ I borrowed plus 2 months interest as detailed by the lender below.
Just I’ve suddenly had a panic after reading some articles that as the mortgage is front end loaded with interest that the settlement figure includes that interest? Also when I check Clearscore the loan shows up with ALL the interest included like I have taken out a massive loan. Whereas the original mortgage doesn’t show like that.
I’m hoping I’ve got that wrong and just panicked myself. I accept that the ‘actual’ amount I borrowed may not have decreased a lot as we haven’t had the second mortgage for long. But it was at a high interest rate at the time.
This is what is from the lender...
Early repayment charge (full repayment): If you repay the mortgage early in full you are required to pay an early repayment charge calculated on the basis of the last two months' interest charge.
I took out a second mortgage a couple of years ago for some refurbishments to the house.
I will be in a position soon to repay that off in full as it was quite a high interest rate.
Am I right in thinking that the settlement figure is the ‘amount’ I borrowed plus 2 months interest as detailed by the lender below.
Just I’ve suddenly had a panic after reading some articles that as the mortgage is front end loaded with interest that the settlement figure includes that interest? Also when I check Clearscore the loan shows up with ALL the interest included like I have taken out a massive loan. Whereas the original mortgage doesn’t show like that.
I’m hoping I’ve got that wrong and just panicked myself. I accept that the ‘actual’ amount I borrowed may not have decreased a lot as we haven’t had the second mortgage for long. But it was at a high interest rate at the time.
This is what is from the lender...
Early repayment charge (full repayment): If you repay the mortgage early in full you are required to pay an early repayment charge calculated on the basis of the last two months' interest charge.
0
Comments
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Front end loaded loans are illegal. All they are doing is showing you the interest that woudl be paid if you kept the loan to the end of its term.
I see no reason for you to doubt their statement regarding ERC.
So yes it does appear you have panicked yourself.
Please do report back on the outcome.0 -
It should be even better than that. The amount due should be the amount you borrowed, plus 2 months interest, less any capital you have already paid in your normal repayments.0
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