This is probably a stupid question, but do I have a Mortgage in Principle agreement?

[KitKat1985]

So we saw a mortgage broker about 3 weeks ago. He has gone through all our finances and outgoings, and taken copies of all necessary documents. Depending on the exact price of the house we choose to buy, we would be either on an 80% or 85% LTV mortgage. However, he has produced for us a long list of companies who will happily give us a mortgage in either instance (we're a pretty 'safe' bet as both in stable jobs and debt free bar our current mortgage) and what our budget is, and so has said once we've chosen a house (and sold ours) just let him know and he'll sort out all the relevant paperwork at that point once we know whether we need an 80% or 85% LTV mortgage. Is this the same as a mortgage in principle agreement?

No, that is issued officially by a specific lender.

As pp said no, it would have to be through a certain lender. We found that if we did need one, we directed the estate agents to the mortgage broker who would confirm finances in place, so it's not always essential.

Oh okay, so not having one per se shouldn't be a massive hurdle then? A long as we can prove we have already certified what we can borrow, which as you say we can do just by directing them to our broker?

We had exactly the same in place with our IFA but the estate agent asked us to bring the AIP document to the second viewing if we were going to be making an offer.

I just picked a reputable high street lender & did an online application. It took about ten mins as I had all the answers to hand following our meeting with the IFA and it was valid for 2 months.

Some estate agents won't even book a first viewing with seeing an AIP so it's handy to have, and one credit check won't affect your credit score.

Okay, so can I not make an offer without an AIP then? Or can I make an offer and then finalise details with the broker once I know the exact purchase price?

I'm just thinking because if there was a house we liked on the market for £285,000 I'd need an 85% LTV mortgage, but if I arranged a mortgage AIP for an £285,000 property pre-offer, but then after I'd made an offer was able to negotiate the vendor down to £275,000, then I could buy with a 80% LTV mortgage so would I need to get another AIP after making the offer?

I can only speak from my own experience which is in the last couple of months.

When we asked to book a second viewing the EA asked me to bring along our AIP.

The online one I did was for the top end of our budget, the affordability check we did with the IFA meant I knew we'd get AIP at that level.

When we made our offer I then had to forward the AIP I had got online & our solicitors details to the EA before the property was marked as SSTC.

We then went back to our IFA who did the full mortgage application with the lender we wanted to proceed with (different to the online one I got) and that was that, the AIP is simply the first stage of the application so your broker will do the AIP to check there's no issue then continue straight into the full application.

The one I did online contacted me about 4 weeks later & asked if I still wanted to proceed with the application, I says no thanks, that was that!

Obviously as I said, that's only my own experience, some EAs I spoke to wouldn't allow us to view properties without first forwarding an AIP, telling them we had it in hand via a broker/IFA wasn't enough.

For the sake of ten mins online it made everything simpler & quicker.

The AIP is literally an affordability check backed up with a cursory credit check - the real work is the actual mortgage application after you've had an offer accepted...

Okay thank you. Looks like the exact process depends on which EA you go through then. Thank you for sharing with me your experiences.

You're welcome, good luck and stock up on plenty of & for the process

Thanks Scarlett. I've been warned about needing quite a lot of for the process so I've stocked up in preparation!

Our broker said not to bother getting a AIP, as it was very quick to get one after making an offer. He said just to say you had a broker and lender in place and refer the estate agent to him if needed. I think it varies depending on the estate agent though. Good luck!

Okay thank you. It does sound like it varies a bit agent to agent as to whether we need an AIP to make an offer, so I think we'll see if we need one first once we get to that point.