"written principle agreement" from lender

adindas

Is it better to ask for "written principle agreement" from lender after people find property or before people find a property.

I am asking because I got info from one the abnk where I am banking suggest me not to ask "written principle agreement"before I find property. Their reason is that>

- For "written principle agreement, they will need a credit serach and it might damaneg my credit score
- In principle agreement will only vlid for 30 days, so if I have not found propoerty to buy, the "written principle agreement, will expire and when I want to get another "written principle agreement" they will need to do a credir search aain and this will again furter damaneg my credit score?

Is it true to what they were saying to me ?
Is it better to ask for "written principle agreement" from lender before or after finding propoerty to buy ?

ali-t

Is the bank you approached Santander by any chance?

They wouldn't give me confirmation of how much they would lend but I didn't ask the reasons why. I was asking them to find out how much they would lend me so they gave me an idea so I would know what my ceiling on property was and I didn't get a firm offer of a mortgage until after I instructed my solicitor to put in an offer.

adindas

Yes it is Santander/ I already know the limit they they are likely to lend me.

I still want to know whether what they are telling me i sthe truth and also whether this is applicable to other banks/lenders ?

ali-t wrote: »

Is the bank you approached Santander by any chance?

They wouldn't give me confirmation of how much they would lend but I didn't ask the reasons why. I was asking them to find out how much they would lend me so they gave me an idea so I would know what my ceiling on property was and I didn't get a firm offer of a mortgage until after I instructed my solicitor to put in an offer.

ali-t

I don't know if it applies to other banks. I have gone with santander again and they gave me the amount they originally stated which was significantly higher than the amount on their online calculator.

I found it slowed things down a bit for me but not so much that it was problematic.

DVardysShadow

If their own search from 30 days earlier damages the credit score of the customer whom they want to credit check again because 30 days is too long for an AIP, they must be morons of the highest order. I would go somewhere else rather than put up with that sort of systemic stupidity. Because if they can do something that stupid, there is really no limit to the stupid stuff they might do later.

adindas

I think the stupidity here is something to do with Credit Scoring Agendy system work, and unfortunetely the bank/lender give them the power and the borrower will just need to accept it.

Say for instance we ask another lender/bank for principle agreement as a comparison, it will further damage the credit scoring as the other lenders will see that some lenders have previously do credit searching and the current lender will also need to do credit searching ...

Unfortunately that is the way the credit scoring system work. Stupid system I agree but unfortunately there is nothing I could do ....

DVardysShadow wrote: »

If their own search from 30 days earlier damages the credit score of the customer whom they want to credit check again because 30 days is too long for an AIP, they must be morons of the highest order. I would go somewhere else rather than put up with that sort of systemic stupidity. Because if they can do something that stupid, there is really no limit to the stupid stuff they might do later.

betmunch

In answer to your question. I would would say get your credit checked before you make an offer on a house. If you want to get one done before viewing, but you shouldnt need to unless you want to.

You shouldnt be turned down for a viewing because you havent got an Agreement in Principal, but it will be very hard to have an offer accepted without having your finances in place.

MRG

One credit search won't damage your credit score 3 or 4 might.
Santander AIPs last for 60 days

Edit: As Betmunch says you stand in a weaker position to make an offer and have it accepted than someone with an agreement in principle.