Mortgage in Principle

Milky_Mocha

I am speaking to a mortgage advisor and so I have some idea how an AIP works. I am interested in ppl's experiences (or anyone with knowledge on the subject) with these regarding the following

• Did you have to base the agreement on a particular property and did you subsequently opt for a different property to purchase? What effect did that have on the agreement?
• how long did it take you to get the agreement and subsequently the mortgage itself?
• Have u experienced a stuation where you were given a mortgage in principle but for some reason refused the mortgage itself?

Thanks in advance for all replies

MyHouse75

Here's my personal experience:

10 August - went to see a mortgage broker. He told us there is no reason we shouldn't get a mortgage and told us to go and view properties and put an offer in if we find one that we like. He told us that RBS has the most suitable mortgage for us and called RBS while we were there to confirm that they were happy to lend us the amount that he had quoted. Left the meeting feeling full of optimism.

12 August- Viewed four properties, one of them was exactly what we were looking for well within our price range.

14 August- Monday morning first thing called the EA and put in an offer. EA called back 30min later and said that our offer had been accepted. Called our mortgage broker straight away who posted us RBS mortgage applications.

15 August- Received mortgage application, a whopping 17 page document.

19-20 August- Filled in our mortgage application over the weekend a week after we had put in our offer. At this point our broker told us that we should have our mortgage decision in a couple of weeks.


6 Sep- Broker tells us that RBS have agreed to the mortgage in principle, but need a reference from my husbands work and will write to his company to request this.

13 Sep- Still no update re. mortgage, by now I've started to pester the broker every second day and have heard a multitude of excuses. Apparently RBS have received my husbands work reference and our application is with an underwriter awaiting final sign-off. This can take up to five working days apparently, so we were told we'd have a decision by 20 Sep at the very latest.

20 Sep- Still no word from RBS. My broker chases them and they say they'll have a decision by tomorrow, 21 Sep (which was yesterday).

22 Sep- Chased broker again this morning. Apparently RBS have not done anything with our application in the last couple of days. Broker says that they have made our application priority and will do the final-sign off today....

So five weeks down the line and we still haven't got our mortgage decision despite having an agreement in principle! We've had the survey done and all looks great, the chain is complete, so seller is just waiting for us to get a move on, solicitor is waiting for our mortgage decision before starting with the searches etc....so our mortgage decision is holding the whole chain back:mad: !

I'm really mad and frustrated, as our landlord and the sellers EA are pestering us! Worst case scenario is that our landlord puts our flat on the market and our mortgage doesn't get approved, in which case we lose the flat we live in and the sale of the house falls through making us homeless!

Apparently RBS are completely snowed under with new mortgage applications, so I wouldn't recommend applying through them unless you have all the time in the world, which I doubt any housebuyer has.

Sorry, this turned into a bit of a rant. Hope this rant answered at least some of your questions.

MortgageMamma

Hi There

My sympathies for your trouble with RBS. I have a couple of cases with them at the moment and am going through the same thing - their current service standards are appalling and I imagine will have messed up many sales in the recent months. I doubt very much any of this would be your brokers fault - this is the third post I've seen this week ranting about RBS

To the OP, don't let this put you off, just avoid RBS like the plague especiallu if you want to move before the spring! Woolwich are also very slow at the moment and I have issues with them. Who has your mortgage broker recommended to you? Hopefully I should be able to put your mind at rest if I know this. Also, I cant stress enough how important it is that you provide your broker with all the documents he asked for first time around. Any delays in sending in ID etc can have a massive impact on the progress a mortgage makes - and some lenders are actually returning cases to brokers that are not correctly packaged.

HTH

MM

herbiesjp

Milky_Mocha wrote:

I am speaking to a mortgage advisor and so I have some idea how an AIP works. I am interested in ppl's experiences (or anyone with knowledge on the subject) with these regarding the following

• Did you have to base the agreement on a particular property and did you subsequently opt for a different property to purchase? What effect did that have on the agreement?
• how long did it take you to get the agreement and subsequently the mortgage itself?
• Have u experienced a stuation where you were given a mortgage in principle but for some reason refused the mortgage itself?

Thanks in advance for all replies

In answer to you points:

1) An agreement in principle is based on your personal circumstances i.e. credit history, income etc and not on the property. So if you change property the only effect it may have is if the figures changed.

2) An agreement in principel can take 10 mins with some lenders if the are on-line. Some others can take up to 48 hours. A mortgage application should take 4-6 weeks to get a formal mortgage offer letter issued. However if the lenders asks for extra information it can take a little longer. As highlighted above, if a lender has had a good rate they may get more business than expected and service can suffer as a result.

3) A full application should conatin the same details as the AIP. YOu would also need to provide certain documents to back up the application i.e. proof of address, ID income, etc. If all the paperwork is as per the AIP there should be no problems

Remember though that a lender can refuse at any time and for any reason i.e if the property is not suitable then they will refuse the mortgage.

As long as you do everything you can from your point perspective, there should be no problems.

Be careful when approaching lenders, if you are asking them to do AIPs for you. Most will leave a "hard" footprint on your credit file which means that other lenders can see the search against your name. Too many visible searches can affect your credit score with lenders. There are lenders that carry out "soft" creit searches which means that whilst they are visible to you on the credit file, they cannot be seen by other lenders.

HTH

MyHouse75

MortgageMamma wrote:

My sympathies for your trouble with RBS. I have a couple of cases with them at the moment and am going through the same thing - their current service standards are appalling and I imagine will have messed up many sales in the recent months. I doubt very much any of this would be your brokers fault - this is the third post I've seen this week ranting about RBS

Just when I had given up hope and was preparing myself for a looooong wait my broker called me and told me that RBS have accepted our mortgage application and will send us the mortgage offer by Tuesday!

I know it's not the brokers fault that it took this long, I bet if it was his decision he would have given us the mortgage ages ago to avoid all the pestering. But hey, as soon as we started with the pestering things started happening. Up until this week me and my husband have been too polite to contact him too often for updates, this week we decided that since the polite approach wasn't bearing any fruit lets get annoying and start calling for regular updates. As soon as we started calling and e-mailing regularly we had the agreement withing a couple of days ...obviously politely waiting just means you stay at the back of the queue?!

Anyway, we are sooooo excited that we finally have the mortgage sorted and things can start moving forward. Waiting for RBS has really slowed the chain down and I know everyone in the chain is eager to get to completion stage, so shouldn't be too long now *fingers crossed*.

MortgageMamma

Good luck I hope it all goes smoothly from now on!

meercatpebbles

I am so pleased that eventually your mortgage has come through but hey I have good one for you.

June ..... yep correct JUNE.....I was given the name of a 'good' mortgage broker and rang him to confirm my options. As I have a clean credit history and a substantial amount of cash to put down I was given an agreement in principle within a couple of days.....obviously valution dependant. I proceeded to put in an offer for a property and instructed the necessary legals to begin. The valuation alone took over 6 weeks to do...... then came the wait...... I am not as polite as MyHouse75 and had no qualms in ringing my 'good' advisor on a daily basis....sometimes twice a day or more because infuriatingly he would never return my calls when he said he would !!!

Anyway the 'almost certainly guaranteed' offer never arrived and to this day still hasn't (now end of September .... june to sept - 3 months). Anyway my vendors got seriously !!!!!! off (which i can understand) as I had told them it would be straightforward. The vendors pulled out of the sale eventually and this whole experience has cost me so far around £1200 .... and what for ....nothing !!!!

My broker is still trying to convince me that the offer is imminent.... but I know now it is too late

Good job I've got big shoulders and can take the heat otherwise I might just have gone crazy.

To be honest it was more the lack of communication from the broker....never calling when he said he would and me having to ring up every day to push him along when all he would say was....next thursday or next week or it's with the underwriters now....blah blah blah.

And people say you should get recommendations ?????

meercatpebbles

Oh and I forgot to mention that when I checked my credit files to see if I could find out what was going on .... I have 5 'footprints' from this one application ....... now just how good does that look then ???:

MortgageMamma

Hi There

Was the lender RBS? I'm sorry you have had such a negative experience. Did your "good broker" ask your permission to obtain an agreement in principle (which involves the credit check?) are all the footprints from different lenders? If so, which ones?

meercatpebbles

My broker did have my permission to get an in priciple decision as I know that I am 'unusual' in that I am self employed....however, my credit history is very good and I have over £100k to play with and the house I offered on was only £180,000.

Because of the self employment I needed to know it would go ahead self certification..... I believe that the source of the footprints came from two sources ... the packaging company (that I was advised would be the best way forward) and the lender (who I do believe is part of RBS)...... eventually after all this time they have decided I must go full status which I cannot...so although they have not turned my application down they have moved the goalposts so far apart that I cannot complete

I was under the assumption that you could get a nonstatus mortgage pretty easily with a good deposit...but I was again advised that this company would lend me 90% which would leave my cash free for other things.....

now looking for another property to buy and wonder if just putting down a large sum of money would make things smoother and easier ?

MortgageMamma

To me it sounds like you need to self certify, and I do wonder if your original broker tried to get you through on a fast track product, which is totally different from self cert. Added to which, I am unaware of any lenders under the Royal Bank of Scotland Group who would lend on a 90% self cert with adverse credit. Perhaps another brokers knows who/what this product is but ts just left me confused.

You could get a non status mortgage quite easily with a good sized deposit but the likelihood of you being accepted depends on the product itself and whether or not you meet the lenders criteria. It doesn't seem like you did with the previous application.

By this I mean

You fall within the lenders affordability calculations or income multiples (whichever way they work)
You have been trading for the minimum time specified by the lender
You are registered as self employed with the Inland Revenue
You come within the adverse credit criteria of the said lender
The property is mortgageable as per the lending criteria (e.g. some freehold flats are very difficult to get mortgages on and properties of non standard construction can narrow your options drastically)

I hope this has given you some insight as to what may have gone wrong, perhaps you could ask the broker you used for a copy of the lenders criteria and see if you can spot what has happened yourself.

Good luck with your next application.

MM