Agreement In Principle - Northern Rock

LongTimeThinker

Hello - I am after a bit of advice (more re-assurance) about our Mortgage which has been agreed in principle.

Its with Northern Rock - IFA rang us to say they have an AIP (I think it was called that, may have been decision in principle which may be the same thing anyway).

Northern Rock are wanting one months payslips which we have already provided to the IFA. IFA says that as long as the value on our new house (new build) comes back OK and we provide Northern Rock with payslips then all is fine.

So - I am trying not to get excited, but does this mean that our Mortgage has been approved (subject to valuation and payslips)? Or is an AIP\DIP pretty worthless or a "rough guide"? Does anyone know if credit check(s) have been done at this stage?

Dont want any nasty suprises later on.

Thanks!

CloudCuckooLand

Don't count your chickens, yet.

LongTimeThinker

CloudCuckooLand wrote: »

Don't count your chickens, yet.

Cluck Cluck

Thanks, first time we have moved home and it seems like lots of ups and downs with lots of "what ifs" going on.

For us first it was getting a part ex value (done), now we are waiting for our survey on our house which fingers crossed will come back ok, then its getting the mortgage etc etc.

Trying desperately hard not to get too excited and at the same time I think my wife thinks I am being miserable, I prefer sensible.

Do you know if credit check has been done yet? I fee like I am obsessing over this but I am a stickler for details.

beetrootrox

Don't feel bad for obsessing. You have to in order to get things done. Nothing will get handed to you on a plate.

AIP is the same thing as a DIP - stands for Agreement in Principle. Either way nothing is set in stone yet and your case will go to an underwriter (if Northern Rock work in the same way as the lender I'm applying to). I don't think they would have done a full credit check yet. An AIP is usually decided based on what you have said about how much you earn, how much the house is worth and how much your deposit is (or part-ex). If the mortgage you are seeking meets their loan-to-value and income-to-loan ratio they will give you the AIP.

If you decide to go ahead with the mortgage application they will make sure you earn what you say you earn by looking over your wage slips. In addition, they may seek employment references to confirm this. They will of course also run a full credit check and study that. Hopefully they will satisfy themselves that they are happy to lend you and your wife the sum of money you require before they go ahead with the valuation.

It is a very slow, frustrating process which will all be worth it in the end but you are right to keep a level head because there are too many things that could go wrong for you to "count your chickens" as CloudCuckooLand said. We got out AIP on 21st Jan and we have just reached valuation stage. I'm still very nervous because if they value the house below what we've offered the lender will only lend us what the valuer says it's worth and we will not be able to make up the shortfall (and the seller won't let it go for less) so the house is still far from ours.

At least in your position you don't need to worry about sellers pulling out which is one weight off your mind.

For now, keep soldiering on and always be at the end of the phone and organised!

LongTimeThinker

beetrootrox wrote: »

Don't feel bad for obsessing. You have to in order to get things done. Nothing will get handed to you on a plate.

AIP is the same thing as a DIP - stands for Agreement in Principle. Either way nothing is set in stone yet and your case will go to an underwriter (if Northern Rock work in the same way as the lender I'm applying to). I don't think they would have done a full credit check yet. An AIP is usually decided based on what you have said about how much you earn, how much the house is worth and how much your deposit is (or part-ex). If the mortgage you are seeking meets their loan-to-value and income-to-loan ratio they will give you the AIP.

If you decide to go ahead with the mortgage application they will make sure you earn what you say you earn by looking over your wage slips. In addition, they may seek employment references to confirm this. They will of course also run a full credit check and study that. Hopefully they will satisfy themselves that they are happy to lend you and your wife the sum of money you require before they go ahead with the valuation.

It is a very slow, frustrating process which will all be worth it in the end but you are right to keep a level head because there are too many things that could go wrong for you to "count your chickens" as CloudCuckooLand said. We got out AIP on 21st Jan and we have just reached valuation stage. I'm still very nervous because if they value the house below what we've offered the lender will only lend us what the valuer says it's worth and we will not be able to make up the shortfall (and the seller won't let it go for less) so the house is still far from ours.

At least in your position you don't need to worry about sellers pulling out which is one weight off your mind.

For now, keep soldiering on and always be at the end of the phone and organised!

Thanks for the reply, usefull info. Lots of finger crossing going on....