Cheque on completion of mortgage

[ohhahhh789]

So my mortgage has completed today and I have received confirmation from my solicitor and with that I have received a cheque which equates to about 2 mortgage payments. It states that this was the balance upon completion.
is someone able to explain to me what this money is and what I should do with it? I mean, it can’t be free money? And solicitors don’t give money away what’s it and should I just spend or will someone expect this from me somewhere.
This after fees are taken so they are already paid.
Thanks!

It’s not free money, you’ve borrowed it. It could be the true-up of the mortgage you redeemed on the previous house when it sold? Or if this is a remortgage, did you apply for the amount you owed a few months ago?

It’s also completely ok to ask your solicitor for an explanation!

You’ve overpaid your mortgage - your mortgage company is simply giving you (via your solicitor) the overpayment back. Spend it!

Yes I got the mortgage offer a few months ago.

You've borrowed slightly more than you needed because it's hard to predict the timings and actual amount required.

You can just use the money to overpay your mortgage, 'correcting' the amount you owe to exactly what you needed to borrow to move house.

You can save it as an emergency fund or just because - if you get a decent interest rate this will likely be at least as much if not more than your mortgage costs you, so will be cost neutral or even make a small profit.

If you spend it, then bear in mind that effectively, you're borrowing that money for the time and length of your mortgage. Which will turn out quite expensive. Eg if it's £2000 and your mortgage is 4% over 20 years, whatever you spend it on will cost you close to £3k.

Thats the answer then. So a few months ago you owed, say, £100k and you applied for a remortgage for that amount. Since then you’ve made, say, four mortgage payments of £1000 each, totalling £4k. Of that, some will be interest payments - around £2k at average rates. The other £2k came off the capital of the mortgage. So on completion day you only owed £98k, but you borrowed £100k, and the excess £2k is the “balance on completion “.

That’s pretty common as it’s really hard to work out an exact completion amount. Sometimes if you are remortgaging with the same company they will match the amounts, but if you have changed provider there’s nearly always a difference. So the money is yours but as a pp has said you will be paying it long term. I’d advise saving it as an emergency fund.

Did you sell a house or was this your first purchase? If it was your first purchase, your deposit monies might have earned some interest while your solicitor was holding them before completion.