Additional interest payment at start of new mortgage?

[yawningbear]

We move to a new house at the end of the week. DP asked for mortgage payment to start on 1st of the month.The offer of loan details repayment figures which were as we expected. it also states 'interest charged in month of advance payable with first full monthly payment'. It is almost as much again as the monthly mortgage payment, all to go out on 1st October, we think, it's not clear. We have tried calling the building society to check what it is for but it is shut. I don't remember having to pay any additional interest charges at the beginning of my other mortgages but DP reckons its standard? any one know what it is for? TIA

[ThisisaSignofthetimes]

Yes, the additional interest is for the month of the advance plus the 1st months payment. It should have been detailed on your mortgage offer.

[suburban]

What date do you move and are you sure they will take the payment on first of October not first of November?

We had some thing similar, completed on the 2nd, but payments didn't start until the first of the next month when we were charged a full month's mortgage plus interest for the almost full month before hand.

Hope that makes sense.

[yawningbear]

That is what I am hoping suburban but DP is convinced otherwise. it isn't,t clear when the first payment will be taken. Obviously I will call in the morning to clarify but it is causing a fair amount of stress! Sorry to be thick Thisis but does interest for the month of advance mean for the month prior to actually taking on the mortgage then? Is this usual? AM fairly stunned at amount of additional money we need to find unless it is as suburban suggests.

[suburban]

Mine was convinced if that too, so we had the money ready (no mean feat on top of solicitors fees etc) so it was a lovely surprise to get a month's respite. What date do you complete?

Also the amount they told us was the max, ie depending on us completing on the 2nd. If you complete on the 30th you will only be charged interest for one day, so it will be a lot less but they will take payment on the 1st of Oct.

If I remember correctly the figure they give is the max it can possibly be, ie if you complete on the 2nd of a month with 31 days.

HTH

[yawningbear]

Thanks Surburban it does, I think, though I am still confused. We complete on 28th September, which makes me think that if anything they should just take a months payment on 1st October as DP says he requested that we make payments on 1st of each month rather than 28th. Also it makes reference to the mortgage starting on 1st October. But the amount of additional Interest is almost two thirds of the total mortgage payment. So I am still and DP is A man on the edge

[suburban]

Ok, if you complete on the 28th I think that on the 1st October, they will take a full month's mortgage payment, plus 3 days interest. They have to print the highest poss amount of interest on all the letters in case completion date changes etc.

[yawningbear]

Thank you for your replies Surburban, that makes total sense, DP is going to ring them this morning to confirm. We saw the figures which weren't at all clear and went into panic mode, as if moving with two small people in tow was not stressful enough!

[LilMissSunshine9]

My understanding is mortgage payments are in arrears. So you are completing on the 28th september. Therefore your first payment will come out on 1st november this includes interest calculated on da ily basis to cover 28th September - 30th September + first months mortgage payment covering 1st oct to 31st oct.

I am completing on the 19th October and my building society has advised me my first payment is due 1st Dec including daily interest for oct + nov month payment.

I was informed that upon completion they will send out a ful lbreakdown of what my first payment is within 2 weeks of completing. Therefore my 1st payment cannot be 1st october as they would not have time to inform me.

[LilMissSunshine9]

sorry i meant to say my first payment therefore cannot be 1st nov.

It can get so confusing when talking dates!

[yawningbear]

Yes, that's it, thanks Lilmiss and Goodluck with your move,