questions from first time buyer

xyz123

Hi
A question from first time buyer…appears that key to get a good mortgage these days is to have a good deposit and shop around (as with almost everything!).

Just couple of questions:
1- everytime you talk to a lender do they do a credit search?
2- what sort of things do they ask for in a mortgage review. Do you need to know what you are looking for and more to point exact area where you want to buy? I know how much deposit I have but cant really make my mind up about a location to be honest.
3- is it best to start with high street bank or to a broker directly.

If it matters, our main account is with FD and have some saving accounts with santander and natwest.

thanks

Let_Us_See

A good deposit and shopping around makes good sense.

To answer your other queries.

1. Just to talk, no. If you progress to an AIP (Agreement in Principle) then the vast majority of lenders will complete a credit check.
2. You should be thinking of the questions and information you should be asking and obtaining. Basically, a lender will require the following:-
   1. Income details
   2. Employment details (if self-employed at least 2 years accounts)
   3. Existing financial commitments - loan and/or credit card balances not cleared monthly
   4. Residential history for past three years
   5. Previous or existing credit problems - any will cause you major problem
   6. Size and (perhaps) proof of deposit
   7. Details of any financial dependents
3. Broker. A good independent broker will cover the whole market, whilst a bank will only cover their own products and criteria. Please be aware that many bank 'advisers' are not qualifed to advise, but just provide information for you to make your own decision. Find a good independent broker, or even visit more than one, prepare your questions before hand (and do not worry how stupid you may think they are), and do not hesitate to ask the broker to repeat themself or make their replies simpler to understand. Mortgages are relatively simple to understand, so make sure your broker has the ability to educate as well as advise you.

xyz123

thanks for your reply but just a couple of queries.


1- understand that broker/bank will do credit check if proceeding to AIP. but if i have all my financial details with me then can they at least tell me how much will they lend me and at what rate? just want to understand what my options are by talking to more than one lender and then proceed with AIP.

i have a clean credit history (both are employed full time, living at same address for 4 years, have 15-20% deposit (based on value of house), no loans/credit cards pending and no dependent.....so hopefully it will go through....


2) also just to clarify re whole of market, does that mean that there is absolutely no point in going to banks. i just think there is something i am missing but if there are whole of market brokers why would any partial market brokers and bank mortgage advisors survive?

thanks
J

Let_Us_See

1. Yes. Both banks and brokers should be able to provide an approximate borrowing level, however, many lenders will adjust borrowing according to credit score. Most providers have online calculators that let you assess you borrowing capacity - and as you have a good credit record thyen it should be quite accurate.
2. Both banks and broker(s) should be visited. A whole of market broker has access to all lenders (and some will also advise you on direct only deals), whilst a bank can only provide details of their own mortgage products.

As to survival - there is a lot of ignorance and (unfortunately) laziness amongst borrowers. A number of well known national brokerages only have access to a small number of lenders, but they are unlikely to advertise this fact. Banks, as mentioned above, only have access to their own products, but have easy access to their existing clients who are often to lazy or inexperienced to look beyond their current bank.

Both banks and brokers have a part to play in the mortgage market, but I would recommend you visit a whole of market broker and pick his brains and experience.