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Original poster

Offer in principle v real mortgage offer

16 replies

MovingtoLondonAgain · 10/12/2018 21:42

I am interested in people’s experiences of their actual mortgage offer, in comparison to the decision in principle they were initially given?

Was there much of a difference?

OP posts:

TC07 · 10/12/2018 22:08

The difference in ours was £200 a month more by the time we got the full mortgage offer. We were at the top of our affordability though and putting down a really small deposit so we didn't really have a wide range of lenders available to us.

Original poster

MovingtoLondonAgain · 11/12/2018 06:23

Thanks TC07 I mean whole amount.

So I’ve been told 315k re fee in principle but wondering if I will actually get that, and therefore how conservative do I need to be when looking at house that are within my price range?

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MrsBartlettforthewin · 11/12/2018 06:27

We were told up to 250k but in reality if we wanted to be able to afford to eat etc the max we could borrow was 220k due to how much it was going to cost us a month.

TiddleTaddleTat · 11/12/2018 08:31

If you google 'MSE mortgage calculator' you can plug in your incomes, term etc and it gives you a range of likely figures. My mortgage in principle goes up to far higher than I would expect to and want to borrow.

Original poster

MovingtoLondonAgain · 11/12/2018 08:41

Thanks all, that’s helpful but I am seeing so many different figures from calculators and other that I am still unclear!

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Notyetthere · 11/12/2018 08:45

Ours was very close to the amount we eventually borrowed. We were first time buyers, very tiny deposit and borrowing to the maximum we were offered. But then our Offer in Principle application was very in depth by our bank due to the product (save to buy) they were offering on their 95% LTV products so we were confident of the figure we had to play with regards to the offer in principle.

However, some banks do a soft search for the offer in principle which could change after a hard search.

Original poster

MovingtoLondonAgain · 11/12/2018 08:52

We have about a 45% deposit and no cards, loans etc... just seeing such a variable band of money between bank DIP, broker and online calculators!

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TiddleTaddleTat · 11/12/2018 09:48

Sorry I wasn't clear in my earlier post - the good thing about the MSE calculator is it gives you different likelihoods of borrowing certain amounts . I think the green band is considered the 'safest' and it goes orange then red, I think. FWIW our offer in principle from L&C went up to the top of the red band, but i only considered borrowing what was in the green.

LondonMischief · 11/12/2018 10:17

The banks online calculator is very accurate in my experience, as long as you put in all the information correctly and are aware of the banks criteria. Usually it is the way that income is calculated
Four example you may include your overtime when inputting your salary in the calculator but the bank may not be one that takes this into account. Or you may include so income form renting a property but a bank may discount it or offer you less because you have a mortgage on it.

Inferiorbeing · 11/12/2018 11:58

We were told we could only borrow 180k, went for a house at 237k (large deposit and family help) only for them to turn around and say we could actually have 240k.. no change in income at all, if anything it had dropped as my DH hadn't done overtime

Original poster

MovingtoLondonAgain · 11/12/2018 19:52

Inferiorbeing Do you mind me asking who that was with?

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Shellyanne131 · 11/12/2018 20:18

If the agreement in principle has been completed using your exact income figures then the mortgage offer amount will be the same. The mortgage offer is produced after the mortgage lender has checked your payslips to make sure you earn what was said you earn on the agreement in principle, so it would only be different if a mistake was made or income was used that the mortgage lender couldn't use if it didn't meet their criteria. Hope that makes sense!

BrusselPout · 11/12/2018 21:02

We had AIP for the same figure as our actual mortgage requirement in the end

ihavetogoshoppingnow · 12/12/2018 14:32

The mortgage offer my mortgage advisor got me was 100k which was around 20k more than the majority of the online calculators had offered me. There was only 1 bank that offered that much though and I’m absolutely maxed out on affordability

Daisy2990 · 19/12/2018 22:37

We had an AIP for 320k and Santander dropped it to 220k during underwriting. No figures changed, but we suspect the broker did not understand their approach to debts (it is their policy to take them into account even if you're paying them off on completion... apparently this is unusual).

We could have still bought the house with that offer but Santander were awful to deal with during the application and we decided not to go with them in the end.

Original poster

MovingtoLondonAgain · 20/12/2018 10:45

Daisy2990 that’s awful! £100k difference for me would mean not being able to buy the house.

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