Mortgage in principle & offering

fivemice

What order is this supposed to be in, or doesn't it matter?

Phoned London & Country who said they won't give us a MIP until we have had an offer accepted. I thought it was supposed to be the other way round?

AndrewSmith

fivemice wrote:

What order is this supposed to be in, or doesn't it matter?

Phoned London & Country who said they won't give us a MIP until we have had an offer accepted. I thought it was supposed to be the other way round?

The best way is to get your mortgage agreed in principle BEFORE making offers as you will firstly know what you can afford, and you will be taken more seriously by the seller.

The reason L&C do not do MIP or AIP or DIP is that they do not want to deal with people unless they have actually found a property and are proceedable thus not investing their time in someone that may not proceed. This is the typical attitude of the highly sales targetted corperate or large brokerage. Having managed such companies and worked in such an environment on the past I cite from actual experience as opposed to simply dissing the opposition (not that L&C are any opposition to me).

My point is this. How can you offer on a property unless you know whether the borrowing is achievable and is affordable, and that a lender will go ahead?

Check these threads to see some further hints and tips.

http://forums.moneysavingexpert.com/showthread.html?t=209805

http://forums.moneysavingexpert.com/showthread.html?t=175653

Andy

fivemice

Thanks Andrew, I read those threads as soon as I joined this particular board

We've spoken to two other brokers - one is currently on holiday for the next 10 days and the other said he'd call us back twice but hasn't and I can't be bothered waiting TBH.

L&C seem efficient, I got their name from the articles here on MSE.

Do you think I'm heading down the wrong path then? Would I be better off going to a smaller local broker?

Just really eager to proceed - the house we are wanting to offer on hasn't had any offers since it came on the market in October and has only had 3 other viewings in that time. Just don't want someone to come along and pip us to the post.

AndrewSmith

They are efficient, dont get me wrong.

But they are geared more towards those who do not really need that much 'help' or guidance as it where.

If you are confident that you can get the mortgage without approaching a lender for an AIP and are reasonably savvy about the process then use L&C. If you are looking for someone to liaise with the lender and get AIP prior to you offering, chase the estate agents and solicitors and offer tailored personal guidance of the process then you may be better going to a local firm.

I have nothing against the business model that L&C employs. It is just that it does not suit everyone.

Andy

AndrewSmith

Picking up on another point, if it has been on the market since October and has only had 3 other viewings on it I would be thinking along the lines of grabbing yourself a bargain.

This is where in my opinion it is vital to have the mortgage agreed. When you are looking to offer on a property with a view to reducing the price paid it is vital to present your offer in the most favourable light possible.

Having your mortgage already agreed and the contact details of your broker available for the agent to verify that this is the case will only strengthen your position when placing the offer, and will demonstrate your willingness to commit to the purchase.

Consider it from the sellers point of view. You have 2 offers as below:

1) Buyer who has seen a broker, has had a mortgage agreed in principle and has a solicitor sorted out. Estate agent has spoken to the broker to confirm that the mortgage is indeed AIP (without giving specific facts and figures).

2) Buyer who has phoned a broker but is not going to get the mortgage agreed or AIP until they know whether their offer is accepted (thus no real way of knowing if the offer is affordable). Estate Agent is unable to verify whether the mortgage is feasable as theire is no evidence of it.

Bear in mind that as a seller you would be expected to remove your property from the market and cancel all future viewings on the strength of the offer received. Which would you accept especially if you are being asked to reduce the price you accept on the property?

Andy

fivemice

That's why I was confused...
Gah. Back to the drawing board perhaps.

AndrewSmith

Not necessarily back to the drawing board, just do what is best for you, not what other's may recommend.

At the end of the day no two situations or purchases are the same.

Best of luck

Andy

hearts

If you think there is nothing likely to hinder them giving you a mortgage. Then why not make the offer and see what happens.

Conrad

A busy efficient broker has little time for AIPs.

Keep in mind many lenders are now using affordability models not multiples. For a broker to present the correct lender, means a huge volume of work checking mutiple different affordability calculators - and then comparing deals.

No one is seriously suggesting a broker can afford to do hours of such work when the client hasnt even found a house. Brokers are well aware many initial enquiries lead to nothing, for one thing first time buyers often decide not to move having reflected for a while.

I cant think of any competent professional willing to give over hours of research in the hope they MIGHT eventually earn some commision.

I know brokers who hand out AIPs like sweets, but clearly insufficient work has gone into them, so they are meaningless.

The only case for AIPing is where only a couple of lenders are possible - for example 100%+ borrowing.

BeerBelly

We phoned L&C cos we also followed the very helpful guide, but I agree they wont spon feed you/hold your hand all the way and ask to be contacted after you have had an offer accepted.

What me and my partner done was go to a comssions free, whole of market Mortgage Advisor that works in one of the ES (they also own a branch of solicitors).

We had a good 2 hour meeting at beginning where he explained the whole process and took all the details he could from us. We then met again and so he could photocopy passports, go through wage slips ..etc. (all before we put an offer in) - we then had the Mortgage in Principle sorted out and printed so we knew what price we could go for and also speed the whole process up as all our details are on the system and he has a copy of everything! We then put offer (accpeted) in and met him again so he could arrange survey and sent Mortgage bits to lender (we are waiting for mortgage offer/searches and survey at present, so still at the start of the journey).

Don't get me wrong hes not the perfect angel - he will try and sell you mortage protection and building insurance with their preferred company, but is easy to opt out and a good one will never ever pressure you!!

I think doing it the way we have has given us time to understand the process and saved time delaying the purchase of having to submitt all paper work and fill in all screens of his database. He got us in a position they we could start the process moving as soon as the offer was accepted.

To be honest if I went with L&C and called them as soon as offer was accpeted my head would be spinning now and I wouldn't have a clue what is going on as I would have to do everything at once (sent/fax all paperwork, sent payment, arrnage solicitors...etc.)

Don't get me wrong Im sure they have their place with the experienced buyer, but I honestly think it is good to go to Mortgage Advisor you can meet for a FTB.

Thats my 2 cents anyway! Hope it helps!

fivemice

Thankyou all for your advice

We've phoned a few other companies and have asked for a MIP to be done and we should hear back tomorrow.

Fingers crossed