Advice on Mortgage in Principal

housebuyer?

Hi All,

Please could I ask for some advice? We have a mortgage in principal from the Bank of Scotland for a tracker mortgage. We have had it for 6 weeks and it runs out in February.

Basically, everyone keeps telling us that they probably won't go ahead with the offer, the rate will change, they won't give us the tracker mortgage and that it doesn't really mean anything.

can anyone offer me any advice on if this is true and is a mortgage in principal worth anything at all? We are first time buyers so this is all new to us!

Thanks for you help.

herbiesjp

An agreement in principle is indeed not really worth anything in terms of getting rates booked.

With BoS the rates only get booked upon a full application - so you will only be able to apply for the deals that are around once you have submitted a full application

grogdog

herbie is totally correct ,and it is likely that the rate is no longer available if you were to try and get it now.

all an AIP is is a note from the lender that based on the information the broker has given and if that can be proven then they will give you a mortgage, it is only when a full application is done that the rate required is mentioned.

housebuyer?

Thanks very much for the advice.

Can I please ask what you would advise that we did now. Nothing has changed in our circumstances since we got the mortgage in principal offer but we have now founda house that we like, do we basically have to start again with looking for a mortgage? are BOS likely to still offer us a mortgage? and what if they have changed their criteria, will we loose the offer?

I would hate to get an offer accepted and then not have a mortgage to buy with especially if it was to cost us loads of money to get as far as finding out they won't give us a mortgage after all!

So complicated!!!

Thanks again

koexelek

Agreement in Principles used to be pretty reliable, but they don't seem to be so much so these days..

Three weeks ago, I got a client approved for a C & G mortgage at £99000. Last week, he found and house and he now only needs to borrow £97500.
When I amended it to the lower figure, it was declined :eek:

I know if lenders don't want to lend, they will sometimes manipulate their scoring to make sure that things that would have passed now fail.

To be homest, things like this happening are pretty rare though

herbiesjp

What you need to do is find what is now currently the best deal on the market for your circumstances

BoS may well offer you a mortgage but it may not now be the best deal for you.

Once you have found the deal you like, then submit the agreement in principle to see if the lender will agree the mortgage (this can be turned around very quickly) - assuming all goes well, you can then convert this into a full application and at that point reserve the deal for you

Are you going direct to lenders or via a broker?

andrewmoorcroft

housebuyer? wrote: »

Hi All,

Please could I ask for some advice? We have a mortgage in principal from the Bank of Scotland for a tracker mortgage. We have had it for 6 weeks and it runs out in February.

Basically, everyone keeps telling us that they probably won't go ahead with the offer, the rate will change, they won't give us the tracker mortgage and that it doesn't really mean anything.

can anyone offer me any advice on if this is true and is a mortgage in principal worth anything at all? We are first time buyers so this is all new to us!

Thanks for you help.

My advice. Dont buy until the prices bottom out. My guess is that there is another 30% fall to come yet. Just look at any historic property price graph.

Tom_Kelly

Find a whole of market mortgage broker who works on commission only. They will only get paid (from the lender) if the mortgage completes. Commission bias should not exist as a broker who is part of a network or a large national firm will have their client files audited by a third party. This means it is that they are unlikely to risk losing their authorisation by offering inappropriate advice.
A small broker authorised by the FSA is responsible for their own audit and so the same degree of regulatory control does not exist. This is one of the reasons why the FSA don’t feel comfortable with the existing framework. I am not saying an FSA directly authorised broker won’t give great advice but there are some who could be led by their own financial pressures.

housebuyer?

herbiesjp wrote: »

What you need to do is find what is now currently the best deal on the market for your circumstances

BoS may well offer you a mortgage but it may not now be the best deal for you.

Once you have found the deal you like, then submit the agreement in principle to see if the lender will agree the mortgage (this can be turned around very quickly) - assuming all goes well, you can then convert this into a full application and at that point reserve the deal for you

Are you going direct to lenders or via a broker?

Hi, we are going via a broker. How would we find out the best deals around at the moment, sorry to be so dense! We are both self employed and have been advised to get a fast track mortgage so I thought this must exclude us from lots of mortgages.

I have looked on the FSA website and BOS does come up as the main one but am open to any ideas anyone might have for other people that might offer a better deal!

I really appreciate the help! thanks!! :T

_Andy_

housebuyer? wrote: »

Hi, we are going via a broker. How would we find out the best deals around at the moment, sorry to be so dense!

That's the job of your broker.

We are both self employed and have been advised to get a fast track mortgage so I thought this must exclude us from lots of mortgages.

Make sure the fast-track isn't being abused - how long have you been self employed and do you have proof of income?

housebuyer?

Make sure the fast-track isn't being abused - how long have you been self employed and do you have proof of income?[/quote]

I presume it isn't being abused, we have been completely honest with our broker and whilst we don't have proof of income (I do both sets of our accounts) I am happy to show the details to the bank/ broker , and have shown the spreadsheets to the broker. I have been self employed for 6 years and my partner for 2 years... Does all of this sound OK??