to ask someone to clarify this - mortgage in principle...

[Bellasblankexpression]

Quick question I'm a bit confused about.
If you get a mortgage in principle with a particular lender is it binding, it that you have to get your actual mortgage with them?
Say if you get a mortgage in principle, and then apply for a mortgage a bit later, and there are better rates around, can you then go to another lender?
Thank you!

Yes you can.

It’s not binding, you have the option to go elsewhere.

The DIP also doesn’t mean they have to give it to you, it’s just a preliminary indication based on what you’ve told them, and will also be dependent on the property you choose.

A mortgage in principle is the lender saying they will lend you the money if everything you have told them is correct and can be verified in the documents you provide for the full mortgage application such as income and employment information. It also depends on the property valuation.

It is only valid for that lender. If there is a better rate available elsewhere you can go with that instead but would need a mortgage in principle followed by a full mortgage application from the new lender.

thank you! So helpful.
And other question, if you see a better rate elsewhere, can you go back to your original chosen lender and 'haggle' with them to see if they can give you a deal to match/beat it? Or is that not really done?

It's not binding, it's simply an indication that they would approve that amount

No, that isn't really done! Be careful getting too many decisions in principle/mortgage in principle as each one is a footprint on your credit file. Id go to a (fee free whole of market) broker and get the best deal for your circumstances that way.

Thanks!

I second a broker is the best way to go to get the best rates. As they can see broker exclusive deals etc.

Also haggling is not done for a Better rate

When you shop around also remember to look at exit fees, over payment allowances, the lenders’ approach to porting, arrangement fees etc...all dependent on your particular circumstances and plans.

If you plan to stay in the house forever, are both employed full time, have excellent credit ratings and go for a very normal house (no annexe, good condition, normal construction) then I think arranging it yourself can be fine, otherwise chat through with a good independent mortgage advisor. If you’re near Bucks/Berks I know a fab one.

thanks - we're not, unfortunately.
I didn't realise each lender requires a mortgage in principle first prior to the application. So that's something to think about due to the credit checks it will require.

We’ve just done our remortgage through London and Country mortgage brokers. They got us a great deal after listening to what we wanted/needed.

If the lender introduces a lower rate, you can ask for that product instead, but it's not haggling per se. The rate/product they offer will depend on your loan to value %.

You have no need to get a further AIP, just use a whole of market broker once you have had an offer accepted on a property.

We did haggle with our existing mortgage lender and they matched the others rate. Second time round (husband always trying to get best rate) they couldn’t go that low so we moved the mortgage. It was a large (over £1m) mortgage though.

It's not binding at all. We had a MIP, had an offer accepted on a house and they rejected our mortgage application (no circumstances or anything had hanged). My motto for buying houses now: trust nobody and nothing until the keys are in your hands!

Sorry to hear that @SenoraSurf fingers crossed we won’t experience the same!

Thanks for all the advice