FTB advice - AIP required?

Nanao_2

I have been lurking around here recently and decided to register to get some advice so this is my first post, please be gentle with me!

Apologies if this has been asked before.

I'm a FTB and am looking to purchase a house with a close friend. We have enough money to put down a 25% deposit towards a property of around £200k.

Having spoken to a L&C mortgage broker yesterday as we were looking to get an AIP, I've been informed that it would be best to contact them once I have made an offer on a property to get the mortgage sorted out - is this correct? I have read some advice on here which suggests getting an agreement in place first. She did some basic checks and have informed me that we could get a mortgage for around £150-£250k.

Many thanks in advance!

debsinbrighton

Hi,

I was in a similar position to you, and took L&C's advice that we could easily get a mortgage of £110,000 and that it was not necessary to get an AIP before making an offer on a property. Then I made the offer and went back to L&C and they told us that we could not get a mortgage with them after all. I am now desperately hunting for an alternative mortgage!

Next time I would get an AIP before I made an offer. Although I'm not sure how it works if you get an AIP then end up needing less money than the AIP was for.

pardal51

I am also a FTB. I've been to LTSB, which I bank with, and they made calculations and can offer us 72% more than we need/want. I therefore didn't go through credit checks to get the AIP. I will wait until I find a property and put an offer then will apply for a mortgage. Very unlikely to be with LTSB (I'm looking at 65%LTV max)

I believe that with a 75%LTV you "shouldn't" have problems (just an indication)

Hope this helps

Nanao_2

Thanks everyone. It sounds like it would be best to get an AIP before I make an offer on a property!

mrcol1000

We saw a property we liked and went to the bank and got AIP. Then we went to view the property one last time before putting an offer in and changed out mind. We then found a property which was slightly more expensive but still well within what we could afford. We then used the exisiting AIP to prove to the estate agents were serious. Offer accepted. So we went back to the bank and made a proper application. The AIP is just a bit of paper to say the bank is willing to lend you x amount and as long as they do credit checks when they do the AIP it should be agreeded when you do the formal application. It doesn't really matter if the AIP is for more than what you need as your still have to do the formal application which is when you say exactly what you need.
I would just get the AIP asap and then at least if there is any problems with your fiances it can be highlighted there and the estate agent will know your a serious buyer.

jozbo

only thing about an AIP though is that they require credit checks and you dont want to have more than a couple of these on your account as makes lenders suspicious. if you're sure you'll stick with this deal then go ahead and get the AIP - this in combo with being a FTB means you're an estate agents wet dream

sonastin

I suggest you get 1 AIP (possibly from the bank you currently bank with) for the maximum amount you could possibly want/afford/be allowed to borrow. Stick with that until you find somewhere to buy (even if it expires - most people's credit history doesn't change that rapidly and most EAs/vendors will understand about keeping the number of credit checks down). Once your offer has been accepted, do a whole-of-the-market search (either by yourself or using a independent broker) to find the best mortgage deal for the amount you want to borrow and apply for that mortgage.

jockosjungle

I'd get an AIP done, it shows EA you are serious and can prove the funds if asked. It also gives you an excuse not to sit down with their evil inhouse MA as you already have an AIP and don't want to mess your rating up. Use someone competitive to get it done as well (post office maybe, can all be done online) so you have even more weight not to use them

Also consider whether buying with a friend is a good idea, at least do you know for sure their credit is good?

pardal51

jockosjungle wrote: »

I'd get an AIP done, it shows EA you are serious and can prove the funds if asked. It also gives you an excuse not to sit down with their evil inhouse MA as you already have an AIP and don't want to mess your rating up. Use someone competitive to get it done as well (post office maybe, can all be done online) so you have even more weight not to use them

Also consider whether buying with a friend is a good idea, at least do you know for sure their credit is good?

I didn't get the AIP and tell all EA that my mortgage is already sorted out with FD @ 2.49% - that's because 1) their inhouse MA can't beat this rate; 2) because mortgage with FD is offered directly only. Therefore I don't get hassled by their inhouse MA

Nanao_2

Thanks for the extra advice, my friend has obtained an AIP from HSBC online - however it does state that this is subject to a credit check.

Jockos: her credit rating should be good I would say, she only has one credit card that she usually pays off in full, and no loans.

debsinbrighton

Hi, I spoke to my own bank last night (natwest) and got an AIP which they are going to post to me. They said they didn't need to do a credit check at this stage, although I am not sure if that is because my internal credit with them is good, or whether the AIP will state 'subject to credit checks'.

I'm now feeling much more relaxed as I know I have a mortgage offer to fall back on, even if I end up finding a better offer.