Mortgage in Principple

Jonathan1985

Hello. is there a way of getting a mortgage in principle document. I just want to go to a lender and see if we will get a mortgage. We do not have a house in mind yet, we just want to know how much could we borrow in our situation

spadoosh

Yeah, youll get this when you go to see a lender and say 'could you do me a mortgage in principle please'

GMS

Speaking to a broker would be a good start.

Who would you apply to for a decision? How would you know if they had the best product for you?

Decisions are only valid for a set period, often 30 days so if you have no idea on a house your DIP may expire by the time you find one.

spadoosh

Do your own research on mortgage costs and rates, been to 3 leading high street banks and all of them said there decisions last 6 months!?!?

Wh05apk

DIP's normally lsay 6 months but, a DIP is not worth the paper it is on, except for your peace of mind, 5 minutes after the lender gives you a DIP they could change their criteria, meaning you no longer qualify. It does show that at the time you had no serious credit issues and were capable of getting a mortgage.

At this stage you want this bit of paper just so you know what price range etc to look in, at this stage it does not matter where you go, if you can get a mortgage with Abbey, chances are you will do so with Halifax, Woolwich etc. Doesn't matter too much about best deals at the moment, as by the time you find somewhere, or even tomorrow, the deals could be different.

Suggest you go to whoever is convenient, or find a broker.

GMS

spadoosh wrote: »

Do your own research on mortgage costs and rates, been to 3 leading high street banks and all of them said there decisions last 6 months!?!?

DIP's or offers?

Burridge60

Lenders re score your case on a full mortgage application anyway so there is little to be gained by getting an AIP!.

You can ring a lender tomorrow tell them you earn double what you do now and they would score you and offer your a Mortgage Promise or AIP. Then read the small print.

Better to use an affordability calculator and be " worst case" about it and then apply when you have a house to offer on.

Viper_7

Quite often though the vendor likes to see that the potential purchaser can actually move ahead. so a mortgage in principle/promise does go towards providing this level of comfort.

The product is irrelevant at this stage as there are so many variables and as mentioned they will change.
Basically pick a lender out a hat ( best off starting with your own bank) and see how much you can borrow.
You'll need to provide your annual salary, any debts, current empoyment - and how long for),estimated retirement age, length of loan, any store cards you may have, and a few other bits and bobs. They will then say they will lend you £x This is always going to be a maximum - and is as said just in principle the lender does not have to honour it.

Burridge60

Viper_7 wrote: »

Quite often though the vendor likes to see that the potential purchaser can actually move ahead. so a mortgage in principle/promise does go towards providing this level of comfort.

Might just prove the buyer is desperate enough to con the estate agent by lying to a lender.

All an AIP does is confirm that someone is okay credit score wise and that, providing the information they gave is accurate that a mortgage might be offered. Just look at the threads where above board applicants are having trouble meeting criteria.

Better if they actually get their mortgage application in and the survey done and pay their legal advisors to start the buying transaction.

Viper_7

Burridge60 wrote: »

Might just prove the buyer is desperate enough to con the estate agent by lying to a lender.

All an AIP does is confirm that someone is okay credit score wise and that, providing the information they gave is accurate that a mortgage might be offered. Just look at the threads where above board applicants are having trouble meeting criteria.

Better if they actually get their mortgage application in and the survey done and pay their legal advisors to start the buying transaction.

Tricky to do if you haven't found a property yet.
If you find one and the and the buyer has not done any home work as a vendor I'd be giving them the cold shoulder over someone else who has.

and who said anything about lying to a lender...? if you give false information to the lender it will damage your credit score..there is nothing to gain...

Burridge60

Viper you mentioned a vendor that assumes that the home is on the market and that a buyer is offering?

And how does the buyer know that you the vendor can move! Do you show them your AIP? Show them your savings to cover your Negative Equity?

It is a two way street.

Next time you buy are you going into your Estate Agent to have an AIP done to prove you can buy the house you have offered on? Or just to help the EA ensure you can afford more than you are offering?

If you get two offers by all means try to make a value judgement but two buyers these days would be a wonderful extravagance!