decision in principle vs mortgage offer

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nudda
nudda Posts: 117 Forumite
in Mortgages & endowments
Hi,

FTB here.

My broker has said he will charge be £500 on "receipt of mortgage offer".

a) Is this a reasonable charge?
b) Is a DIP different to a mortgage offer ?

Thanks!
«1

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  • ACG
    ACG Posts: 23,727 Forumite
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    That is pretty much the way I do things.

    A Mortgage offer means the valuation and underwriting are both completed, so effectively the brokers job is more or less done.

    A decision in principle means yu have passed the initial credit check, but no underwriting or valuation has been carried out.
    I am a Mortgage Adviser
    You should note that this site doesn't check my status as a mortgage adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.
  • nudda
    nudda Posts: 117 Forumite
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    thanks!

    so does a DIP leave any footprint on your credit check ? (guesing it does but not sure if hard or soft)
  • Lolly88
    Lolly88 Posts: 322 Forumite
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    nudda wrote: »
    thanks!

    so does a DIP leave any footprint on your credit check ? (guesing it does but not sure if hard or soft)

    It depends on the lender, some do and some don't.
    Homeowner
    :j
  • nudda
    nudda Posts: 117 Forumite
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    Ok thanks!
    Is it true that multiple credit checks in 1 month dont have such a negative impact, as credit agencies understand these checks are done as part of searching for products? Worried that my credit ratign will go down if too many peoeple check within 30 days
  • Lolly88
    Lolly88 Posts: 322 Forumite
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    No - that's not true as far as I know. Lots of hard searches in 1 month would still gives the impression that you have applied for a lot of credit in a short space of time and therefore indicating potential money management issues. But not all lenders do hard searches and you wouldn't need to be doing multiple decisions in principle anyway.
    Homeowner
    :j
  • nudda
    nudda Posts: 117 Forumite
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    that is interesting. I am looking at around 3-4 DIP's I guess
  • ACG
    ACG Posts: 23,727 Forumite
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    DO NOT get 3-4 DIPs.

    Some lenders do soft footprints so no real harm done, but getting it wrong could cause a lot of damage.

    Nobody needs anything more than 1 DIP.

    Check criteria.
    Check affordability.
    If happy it all fits, get a DIP.

    Why would you need any more than 1?

    I am of the opinion you do not need a DIP until you know how much you are buying for and are ready to apply. Rates and criteria can change daily so the best lender today may not be tomorrow.
    I am a Mortgage Adviser
    You should note that this site doesn't check my status as a mortgage adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.
  • E&G
    E&G Posts: 49 Forumite
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    So what can go wrong between DIP and mortgage offer from an applicant (rather than property not meeting valuation or lending criteria)?
  • ACG
    ACG Posts: 23,727 Forumite
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    The information may not have been entered into the dip correctly - the big problems here are overtime, bonuses, commission, benefits and commitments.

    I could get myself a DIP tomorrow for £300k but I could never get a Mortgage for that amount.

    Have a read on here how many people get DIPs and then their application is declined.
    I am a Mortgage Adviser
    You should note that this site doesn't check my status as a mortgage adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.
  • mr_munchem
    mr_munchem Posts: 102 Forumite
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    I've got some decisions in principle today, and have only got ones that were very specifically soft searches - I think if I were to find a 'hard' search at this stage with an AIP/DIP I would go back to the reference agency and ask it to be corrected, as the banks are all very specific if it is a soft search!
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