Mortgage in Principal without knowing final property cost

Adammmmm

I guess this may seem a bit odd, but we are first time buyers and have found a property which we like. We have made an offer which is lower than the current asking price and would like to obtain a mortgage in principal to show that we are serious and ready to proceed asap.

Without knowing the final price of the property is there any way of finding the best mortgage for ourselves and obtaining a MIP? Our offer is within 15k of the asking price if that helps

ACG

If you obtain an AIP (Agreement in principle) for anything more than you have offered then the estate agent will know that you can go higher.

If you get an AIP for what you offer and its rejected you then have to do a second credit check.

Best route in my opinion is to make an offer, get it accepted and THEN get an AIP - it only takes a few minutes if your credit report is fine.

Adammmmm

Ahh great thanks! The only debts we have are student loans. Neither of us have a credit card or any finance issues like that so we should be fine hopefully.

We were worrying as if the vendor does accept our offer we both work full-time and wouldn't be able to visit a branch to setup a mortgage until the weekend. Is it just as good to setup the mortgage online as it is to visit the branch and set everything up with an adviser?

Thanks again so much for your help! It is all so confusing when you have never done it before hehe

ACG

You can apply for a mortgage over the phone. It wont make too much difference.

I might come across as biased but is there any reason why your not speaking to an actual mortgage advisor rather then your bank? They can deal with everything while your in work and can usually do appointments in the evenings - outside work hours.... just a thought anyway. I would keep away from the estate agents mortgage advisor though as you cant be sure theyre working for you (rather than the estate agent).

Adammmmm

Hehe i was worried about the estate agent mortgage advisor knowing what kind of funds we have in place as there could easily be a conflict of interest there I imagine if they know you can afford more etc.

I would be more than happy to speak with a mortgage advisor but it seems to be a nightmare to find a fees-free 'whole of market' broker as outlined within the guide. The only option seems to be London & Country currently?

ACG

There are brokers who dont charge a fee, but i think they are in the minority.

Its all well and good Martin telling people to look for fee free, but would you rather pay someone £500 if they could save you £500 on the deal you have found with your bank and do the work for you or stick to your bank?

Also any insurance you take out is generally cheaper if done through a broker than it is through the bank.

L&C are fee free though so if nothing else you have one another option alongside your bank...Im not sure if they do face to face appointments or not though - if thats something you want.

Adammmmm

I'm not necessarily thinking of going to my current bank for a mortgage. I don't mind going through a few different comparison sites and such to see which lender is currently offering the best option, although i appreciate that brokers sometimes have the access to additional options not listed on these sites.

I guess what it comes down to is would a broker be able to find me a deal £500 better than i can find myself online, as £500 would be a hell of a lot for paperwork alone haha I suppose this uncertainty is why many people prefer the fee-free choice if available?

GMS

Comparison sites wont know criteria, check affordability or match your needs and preferences.

Applying to your bank will get their products only.

Using the EA broker will to all intents and purposes 'reveal your hand'. You wouldn't go into a game of poker with your cards on the table so why enter into a huge commitment that way?

In terms of a DIP there are lenders who will not credit score. One lender who are offering rates at the top of the tables will allow 3 different DIP's for the same credit search so nothing to stop a decision for the highest amount with the reduced amounts to follow as and when agreed.

ACG

If your situation is straight forward enough, then getting on a few comparison sites will at the very least help you to find a competitive rate.

Brokers have their place but so does doing it yourself.

From a brokers perspective, we earn about £300 before costs on a £100k mortgage, for all of the work and time its not really worth doing it without charging a fee, which is why your finding it difficult to get a fee free broker.

Adammmmm

I suppose the reason L&C are able to do things fee-free is that they have a pretty constant flow of applicants, however their communication/processing speed is probably not as quick as a more personal broker due to the number of applicants they are dealing with at any given time?

GMS

L&C get very varied reviews.

Try them and see what they come up with. Might find your case is too complicated for them.