Mortgage in Principle - how fast do I need to act to secure it?

Woodyrocks

Hoping someone can help me on this. I am a FTB that is trying to do things in the right order!

I have now been informed by my broker that I have a mortgage in princple from the Halifax. To qualify for the product I must complete on the mortgage by 31/08/2012 which should be no problem.

Everything seems fine with the form. The overall cost for comparison is 4.4% and everything is clearly stated including broker fees. My question is this if I commit to this deal what happens now? I see that I do not need to pay my broker until 14days after completion so I am guessing there is no hard sell there. But you see I wanted to know what I could borrow first and though I have researched perfect areas and gone to see properties (from the outside!) I am yet to formally start the trawl. Will this put off the broker and the Halifax?

Also, was a credit check undertaken to get this mortgage in principle or will that not be until I go for it properly because that could mean I could then be refused, right? I am worried that I am not going to actually get the loan I need which will leave me in a right pickle :eek:

I have never done anything like this before and if I am being honest I am slightly scared. I don't want to frigg up something along the way or mess myself up in anyway.

kingstreet

You seem to have been peddled a line so far...

If you have applied for an agreement in principle from Halifax only a soft footprint has taken place and nothing will be visible on your credit file. You have not reserved any rate or other product and getting a mortgage is still subject to a full application, a full credit score and payment of any fees. There is no deadline.

An agreement in principle last for three months, off the top of my head, but as there's little chance of Halifax offering you the best deal anytime soon, it's a bit of a waste of time... other than giving you an idea of what you can borrow and the deposit you'll need.

Have you selected an independent broker? If you have, you pay a fee and any commission payable to him will be rebated to you to subsidise your fee. A whole market broker only recommends commission paying deals, so you may miss out on the products the likes of HSBC, YBS and ING have to offer which don't. If he's getting commission and charging a fee, are you getting the right advice?

You're probably even more confused, but you should have received an Initial Disclosure Document which tells you what the broker does, how he picks mortgage products for you and how he is remunerated. Telling us which boxes are ticked will help to identify what kind of broker you have.

Is this someone who works for a national chain of estate agents?

Woodyrocks

Thank you for the quick response. The document I received to look over once the broker informed me of the AIP is a keyfacts document. It is 9 pages long and does have information of what the broker will receive from the Halifax in the form of remuneration and from myself in fees. The mortgage broker does not work for a national chain. I am happy to message you the name.

I did want to know if I would be able to access a mortgage for the amount I needed and I thought this meant I could / can but are you saying that this is not really the case. I also asked him if I had been credit scored when I spoke to him about 40mins ago and he said yes. Not quite sure what to do now, I do not want to go looking and putting in an offer only to find I can't actually get a mortgage required.

The form has payment details for the whole 25 years of the mortgage and the different rates such as the fixed rate amount until 2015 that I will be paying. It also has early repayment information, section about insurance and all fees attached to taking it out such as valuation and mortage accounting fees.

drummer_666

Your broker has given you an amount that you will be able to borrow. So you have that figure in mind.

Now, don't commit to anything until you have found a house and got an offer accepted.

your broker should already have things like payslips, bank statements, proof of id and address. if not get that all set up, but that's it.

as soon as you get an offer accepted ring your broker, they will see if there are now any other better mortgage deals for you. rates change ALL the time with lenders! You'll then chose the mortgage to go for and the broker will give you a DIP. When I told my broker I'd had an offer accepted, he got me an up-to-date DIP to reflect my offer that evening so I could email it to the EA the next morning. My broker also spoke to the EA the next morning.

So basically, (apart from filling in broker forms and sending them documents) you don't need to do anything more with broker until you get an offer accepted