When will my first mortgage payment be taken?
The lender will write to you 10-14 days after completion to confirm when your first payment will be taken and how much it will be. Your first payment tends to be slightly higher than the amount stated on your offer to cover any additional days interest but the letter from the lender will confirm this.
I am completing on the day that my mortgage payment usually gets taken, can I cancel my direct debit?
Do not cancel your direct debit. Sometimes your existing lender will still take the mortgage payment and then they will refund the majority of this back to you once your mortgage has been cleared on their system. Your new payments will usually come out the following month.
Do I need to do anything on completion day?
There is nothing that you will need to do on the day, your solicitors will pay your existing mortgage off and set up your new mortgage with your new lender. Your solicitors will email you to confirm completion and we will also chase the solicitors to ensure it has taken place smoothly.
I am due some funds back – how do I get these?
Once completion has taken place, your solicitors will send the funds to you via your preferred method (which you stated on your initial client questionnaire). This tends to be either bank transfer or a cheque via post.
My solicitors have advised there is a shortfall/surplus – what does this mean?
If the outstanding balance on your existing mortgage is higher than the loan amount stated on your mortgage offer from your new lender, your solicitors will advise you and ask you to cover the difference. We recommend you speak to your solicitors regarding this as some lenders have a buffer in place which may cover the shortfall amount without the need for an amended offer. If you have any queries regarding this once you have spoken to your solicitors, let us know and we will assist you.
When submitting a new mortgage application months in advance – it is impossible to guess the exact mortgage balance that you will have a few months down the line (this can be affected by daily interest / overpayments / payment holidays / and what day of the month you pay your mortgage on) – It will vary rarely be penny perfect, so there is always likely to be a surplus or a shortfall.
If there is a surplus (and you weren’t expecting this) then you can simply pay this back to the new lender once your mortgage completes if you wish.
If there is a shortfall then this can be dealt with in numerous ways:
The lender may offer a buffer facility (dependant on which lender) and the solicitor can simply apply to use this if there is one in place.
You can simply pay the shortfall (as this will be reducing your own mortgage balance accordingly – It is not an extra charge, it is your mortgage balance that will be reduced).
If the shortfall is larger than expected then we can also look to increase the new mortgage offer (this may delay things slightly and may require the lender to ask for up to date documents from you and consist of a new credit check).
As mentioned earlier in this letter though – the most common reason for a shortfall or a surplus is just due to timing of your current mortgage payment and your existing lender sending a redemption statement to solicitors based on a figure as of the day that the solicitor requested the statement (and doesn’t take into account your mortgage payment that you will / may have paid after that date) – if this does happen then the existing lender will refund you any overpayments that you have made (usually within around 14 days).