Small amount left on mortg after redeeming it

J

jim

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I think iv made a mistake and am looking for advice.

Im doing a 3 way mortg switch at the moment.

Bank 1 = received cashback
Bank 2 = drawndown, awaiting cashback
Bank 3 = about to drawdown

Bank 1 sent me a letter today to say that €174k had been paid off the mortgage but that a "small balance remained". When i phoned them they said it was about €550. This is approx 1 months capital repayment as my monthly mortg is about €800.

Bank 1 are sending me an exact redemption figure by post.

Im a bit confused about how to resolve this so any advice please would be very welcome.

Maybe its the final mortgage payment that needs to clear this? Alternatively, and i dont have the figure just to hand right now, I suspect the mortgage amount i applied for varied slightly between bank 1 and bank 2 i.e €174k versus €175k. Could this have caused the small remaining balance?

Let me know any questions either.

Thanks
Jim
 
Jim,

When the first bank provided your redemption figure, was the accrued interest included?

I had a similar issue, and it was the accrued interest balance - the redemption figure wasn't clearly laid out.
 
Good question redonion. Im not too sure. I dont remember ever seeing a redemption figure from bank 1. Tbey said today that they would post this out to me.
If its just accrued interest then is that just a normal payment that i must pay myself like a mortg payment?
 
Yes, unfortunately. I ended up having to pay a DD the month after my house was sold because of this - it was about half the normal repayment.

Your solicitor should have got a redemption figure from them.
 
Good man Jim for going after the 3 switches . What kind of time frame did you do them in? Sorry for getting off the point but i love a good triple switch ;).
 
Hi sean og,

So i started the ball rolling last october, had my three offers in place by christmas. I drewdown bank 1 in feb and bank 2 in early may. Am rushing now to drawdown bank 3 before mid june when offer expjres but am on course to do that.

After paying solic fee and valuers i should have a net profit of about 6.5k from it all which is brilliant.

Fair bit of paperwork obviously and some chasing here and there but all in all its being easy.
 
Am I right in saying RedOnion that I am kind of in the same net position anyway regarding this small outstanding balance that I need to pay. I.e i would have to pay it anyway with the drawndown amount from the bank i switch too (so bank 2) (in which case my switched mortg would be a tiny bit higher and so ultimately i pay for it this way)? Miggt have been a slight disconnect when applying for bank 2 mortg in terms of making sure mortg amount to drawdown fully matched mortg to redeem at bank 1.

So its all the same whether i jus to a DD now to fully redeem the mortg with bank 1 versus having a slightly increased mortg with bank 2 to fully redeem bank 1? Hopefully that makes sense.
 
Yes, your net position is the same.
The key thing is that they've released their charge so you were able to switch lender.

Out of interest, was it AIB?
 
Ebs to ptsb to boi to aib

Was with ebs at start of process.
Switched to ptsb in feb, cb received.
Boi in may, cb due late june.
Now about to drawdown aib, cb due whenever..july..

So its ptsb that im having this slight issue with altho as you say its not really an issue as i was going to be paying this regardless.
 
check redemption figure given to your solicitor by ptsb. PTSB put a moratiorium on interest for 20 days from issuance of redemption so if the solicitor paid correct amount it should be cleared. Your drawdown will always be more than redemption and you should get the remainder - do all the figures tot up?
 
I am not sure what happened with the redemption figures etc but the way I look at it I might aswell just pay the €550 owing to ptsb asap. The redemption figure with ptsb (Bank 1) would have been 175k (amount of mortg applied for) minus 2 months of capital repayments so approx. 174,500.

The mortgage I drewdown with bank 2 was 174k and so that's what the solicitor would have sent to ptsb to redeem their mortgage leaving the balance owing of €550.

So even if I had drawn a slightly increased mortg with bank 2 (and so would have fully covered bank 1 redemption) id have a slightly higher mortg by €550 so its all the same really. Unless I am missing something.
 
without getting what the redemption figure was from solicitor you can only guess. If it was me, I wouldn't pay untill I had all the information. all banks insist on getting a statement from your current mortgage to ensure the drawdown will cover the full mortgage. So something is not right here.

At the very least your solicitor should have told you didn't fully discharge from Bank1. So basically, one way or another, your solicitor screwed up (unless of course you were not paying your mortgage after gave evidence of outstanding mortgage to bank1).

It is advisable to get to the bottom of this as you plan on moving again, and haven't gone a month from bank 1 yet
 
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Dauhee said:
PTSB put a moratiorium on interest for 20 days from issuance of redemption
Click to expand...
Are you suggesting that PTSB potentially don't charge for interest between redemption letter and receiving the funds if it's less than 20 days??
 
Bank 1 are posting me out the exact redemp figure which in any event i need to pay so ill just do that.

If this had to have been done differently then my mortgage drawndown from bank 2 would have equated to bank1's redemp figure but i then would have had that amount of roughly €550 tagged onto bank 2 mortg so no matter what way you slice or dice it im liable for this amount.

Doesnt matter to me at this stage if solictor didnt do something correctly. All that matters is the bottom line.

I will query it with my solicitor though.
 
RedOnion said:
Are you suggesting that PTSB potentially don't charge for interest between redemption letter and receiving the funds if it's less than 20 days??
Click to expand...

yes. all banks do it to varying intervals. That way there is no remainder amount between finding out how much is owed then delay for solicitor drawing down and transferring. Otherwise the redemption figure is a moving goalpost. For example - Pay off redemption amount (174k), then request another redemption figure , pay that a few days later (lets say 550), then request another redemption figure, then pay that a few days later (lets say 2 cent)
 
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jim said:
Doesnt matter to me at this stage if solictor didnt do something correctly. All that matters is the bottom line.
Click to expand...

I'm not going to bother posting any more advice so. You are satisfied to have a minus 550 bottom line for some unknown reason
 
Dauhee said:
yes. all banks do it to varying intervals. That way there is no remainder amount between finding out how much is owed then delay for solicitor drawing down and transferring. Otherwise the redemption figure is a moving goalpost.
Click to expand...
I have to say it's the first I've heard of it!

Any redemption quote I've ever seen is valid on the day it's issued and has a figure at the bottom that clearly shows the amount of daily interest.
 
can't hardcode a value for interest to be charged - with compound interest, the daily interest goes up as the outstanding does.

I am certainly open to correction, but this is what I have seen.
 
Dauhee said:
can't hardcode a value for interest to be charged - with compound interest, the daily interest goes up as the outstanding does.
Click to expand...
Interest doesn't compound daily. Calculating daily interest is one if the easiest things to do.
 
Any redemption figure quote I have ever seen had an amount valid up to a specific date and a daily accrual of interest figure after that for a set time, possibly 30 days from memory. After that you need to reapply for a new one.

Also usually if there was a payment due in close to redemption figure quote it was not always included in the calculations as it could be returned unpaid for a period of time. This sometimes resulted in a credit on the account after redemption when the payment fully cleared, this would be returned to customer.
 
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