Getting a quote before you're ready to get a mortgage

redonion

I'm not yet quite ready to get a mortgage, but I want to know whether I'll get one.

My landlord is selling up and there's not enough time to buy before I have to leave, so I need to find another place to rent first. The London housing market is full of, er, compromises, so to find a place I feel happy settling for, it would help me to know where I'm headed. If I knew I could get a mortgage at some relatively foreseeable and not too distant time in the future, it would help me be happy settling for a place that's not ideal but is cheaper. Or a place that's more expensive than I'd like, but I know I'll only be in for a while. On the other hand, if I know I can't get one for a while, I'll know a longer rental contract will be less important.

But, I've heard that when you get a mortgage quote, the credit search goes on your record and if you end up with too many it counts against you. Since I have to rent (new contract, likely 6 months), find out more about mortgages, view some places to get a feel of the market, and even think about buying somewhere other than where I live, it's going to be at least 6 months before I get a mortgage.

Is a credit search or two not going to be a problem given the 6 month gap? How many searches is too many? Even if it doesn't tip me over the line into not getting a mortgage quickly, might it limit the amount of shopping around for a good mortgage deal I can do nearer the time? Or is there some more informal way for me to get some confidence about what position I'm in than actually getting a proper quote?

Thanks

kingstreet

Wait until closer.

Order your credit files from the three CRAs to ensure you have no issues which will need to be resolved.

Equifax

https://www.econsumer.equifax.co.uk/consumer/uk/order.ehtml?prod_cd=UKSCR

Experian

http://www.experian.co.uk/consumer/statutory-report.html#orderReport

CallCredit

https://www.callcredit.co.uk/stat-report-online/index.php?action=basket_add&tpl=setRegister&package=63&amount=1&mode=clear

Use the £2 statutory files and don't pay for meaningless "scores."

redonion

kingstreet wrote: »

Wait until closer.

Order your credit files from the three CRAs to ensure you have no issues which will need to be resolved.

Equifax

https://www.econsumer.equifax.co.uk/consumer/uk/order.ehtml?prod_cd=UKSCR

Experian

http://www.experian.co.uk/consumer/statutory-report.html#orderReport

CallCredit

https://www.callcredit.co.uk/stat-report-online/index.php?action=basket_add&tpl=setRegister&package=63&amount=1&mode=clear

Use the £2 statutory files and don't pay for meaningless "scores."

Thanks, I'll do that. How frustrating not to be able to find out - it really would help me decide how to rent!

Having read the MSE first time buyers guide and browsed the forum a bit, I'm still unsure what exactly constitutes an issue that justifies waiting before trying for a quote (In my case, the strikes against me I know about are two missed CC payments, which will be about 2 and 4 years ago when I apply for a mortgage). Waiting past the point a few months down the road when I actually am ready to buy, that is.

Incorrect data is relatively straightforward: if there is any, I should just try and get it corrected. But if it's things that are only repaired by time, like late payments, or perhaps unfavourable monthly payment amounts (I'm not sure whether there such a thing?), then it's less obvious what to do: to wait, or not. Do you have any rules of thumb?

kingstreet

There's a difference between "getting a quote" as you put it and getting an agreement in principle.

A mortgage quotation is a key facts illustration. This lays out the product terms, amount to be borrowed, term, fees, redemption charged etc. It doesn't determine if you will be granted a mortgage.

If you want an answer to that question, you need an agreement in principle. This involves a credit search and will confirm how much you can borrow. One search should be of little harm and may give you guidance.

As I said, as an alternative getting your credit files and knowing there's nothing to worry about, leaves you in a position of reasonable confidence, where a lender's online affordability calculator will tell you the maximum you can borrow.

Dan-Dan

How long does a mortgage offer , or an AIP , stay valid for ? (hope OK to ask on your thread redonion , i thought it was quote relevant!)

kingstreet

It varies from lender to lender.

An agreement in principle can last upto three months.

A mortgage offer normally has a six month life, after which a new valuation will be required. Some lenders have products where the drawdown deadline is different to the mortgage offer. This means you could have to select and pay for a new product if you pass the deadline before you complete, or request an extention from the lender.

As an example, Halifax offers mirror their deadline, with current normal (non newbuild) products having a drawdown deadline of 31/08/2013.

Nationwide purchase offers last six months, mortgage offers three.