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Original poster

When to arrange mortgage in principle

12 replies

Rudolphian · 19/08/2020 16:19

I've been saving up a house deposit.
We have been hoping to move for a while. Luckily my job is pretty secure.
Last year I saw a house I really liked. I arranged a viewing and an appointment with a mortgage advisor.
Unfortunately the viewing fot cancelled because the house went under offer. I attended the appointment with the mortgage advisor and got a rough idea of what I could.borrow, but he needed a lot of paper work in order to arrange a mortgage in principle. I didnt bother because the house viewing fell through.
Ive just seen a house for sale that looks really good. I've booked a viewing for next week.
But not sure when or if to also book an appointment for the mortgage I dont want to waste the guys time. I have a rough idea of what I can borrow but with the way the market it am not sure of the availability of mortgages so dont want to be making offers if in the end I cant get that mortgage.
I dont have to sell to buy the house.
Advice please!

OP posts:
Original poster
Rudolphian · 19/08/2020 16:22

I mean if we stretch ourselves we could probably arrange a 15% deposit but depending on what they accept if we like the house and have to offer more, how easy are people finding it to get a 10% mortgage

OP posts:
squeekyclean · 19/08/2020 16:47

You'll need to be able to prove you have a mortgage in principle before any offer you want to put on a property will be formally accepted but it may make a 'mark' on your credit rating so it's best not to do it too often.

Most lenders have an online mortgage calculator that will give you an idea of what they will lend- so you can check this before asking for an application in principle. If you are using a mortgage broker I would ask them not to do anything that requires a 'hard check' until after you have had an offer accepted (this is the check that other lenders will see if they check your credit).

I recently bought and sold a house and only got a formal mortgage in principle offer the day my offer was accepted. Before that I had discussions with the lender and a good idea of what they would lend/terms etc but nothing formal. Getting the offer in principle only took a couple of minutes over the phone and was e-mailed to me immediately so I was able to take it to the estate agent to proceed with the offer the same day.

As an aside- one estate agent I tried to view a property through put a hard sell on me to speak to their mortgage advisor, telling me they could find products no one else had access to and trying to make me think I'd end up not being able to get a mortgage if I tried to arrange it with the lender directly. In actual fact nothing the offered came anywhere close to what I was offered by my bank directly . The estate agent's advisor also put pressure on me to let them run an application in principle immediately (before I had even found a house I liked) but the bank advised against doing that.

HooseDilemma · 19/08/2020 17:00

Get your AIP first. If the housing market is quick where you are, waiting until after won't be quick enough. We were not able to put in an offer on our house without an AIP. We were not considered proceedable without it.

Also, ours didn't change, but our estate agents have said they're seeing lots of people having the amount they can borrow post Covid, so they aren't accepting old AIPs anymore.

There are also very very few 90% LTV mortgages available right now. And even fewer if you aren't a FTB. Our mortgage advisor is basically saying 15% or don't bother tbh.

If your broker wants loads of info, just look at someone like l&c instead where you can do it online and then just supply the docs when you need the mortgage.

minnieok · 19/08/2020 17:02

You need a mortgage in principle to put in an offer, they last 3 months. It took us about 30 mins online to get one. It doesn't commit you to using that provider so worth doing as soon as you arrange viewings you are serious about

Original poster
Rudolphian · 19/08/2020 17:07

I'll ring my mortgage advisor I just dont want to waste his time if we dont end up liking the house. It's just last time he had a 3 week wait before I could get an appointment with him, but he is really good and knows what he is doing.
Online though you can get one easily if you put in fake info so not sure how relevant those are.

OP posts:
SammySays · 19/08/2020 17:11

You don’t need a mortgage in principle to put in an offer. We spoke with London & Country (free broker recommended by money saving expert) who took all our financial details and informed us what we would be approved for. They then provided us with an affordability letter/certificate which we provided to the estate agents when we put an offer in. That was accepted and then arranged our mortgage in principle based on the actual value of the house etc. Good luck!

Original poster
Rudolphian · 19/08/2020 17:21

Ok just arranged an AIP with the Halifax but wasnt sure of what to put for some of the answers and wasnt sure if I was missing some of the expenses I should be putting on. I mean it didnt take long so I'm not sure it's worth the paper it's written on, if we like the house will arrange an appointment with the mortgage advisor.

OP posts:
HeeeeyDuggee · 19/08/2020 17:25

In my experience of house buying estate agents want to see AIP or similar to prove that your financially viable when viewing / making an offer. You can get an AIP in minutes from the bank however it doesn’t guarantee your mortgage will be approved (I’ve had lots of friends be given an AIP and then when they go through the process to make it an a offer they fail the credit checks etc) best use a broker they can help you the most.

I seem to remember our AIP was valid for a good few months so even if this house doesn’t work out at least you’ll have the paperwork you need to act fast on the next one

Original poster
Rudolphian · 19/08/2020 17:58

Yes I've got it. But wasnt sure on a couple of the questions so not sure how accurate or useful it actually is, especially from the sellers point of view.
I'm going to have to speak to the mortgage advisor when it comes to getting a mortgage because the finances are complicated.
Do they have a way of checking your income so they can decide how much they will lend on the AIP or do they just accept the figures we input.

OP posts:
HeeeeyDuggee · 19/08/2020 18:10

For AIP we just have them figured but when we converted ours into a mortgage Offer we had to provide proof of income, expenditure, deposits, savings, bank statements etc

HeeeeyDuggee · 19/08/2020 18:11

I guess with the AIP you could b lying about your income etc to get one but then your just wasting your own time too because your mortgage offer won’t be approved so it seems a bit silly and I can’t imagine why people would bother!

Bells3032 · 19/08/2020 21:02

I looked at 15 houses across multiple agencies and didn't get asked once for an aip (one person asked me to speak to their broker and I said no and they still showed me the house). Tbh an aip is not worth the paper it's printed on as you can rarely get as much as they originally promise. I wouldn't go to the absolute max they say as I know a lot of people who got caught out when doing that as the bank then about turned and said they won't lend as much.

Also it doesn't take into account your down-payment. We were putting down a 50% deposit so if we had had an aip it wouldn't have shown anything close to what we were buying.

I know in some areas the agents are hot on it though. It doesn't take long to do so wait til an agent asks for it

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