Got an agreement in principle! - but why is the rate so high & get we get a better 1?

Ktaylor86

Hi all,

My husband and I are first time buyers and we have seen a shared ownership house we like (We are looking to buy a 50% share).

Due to various factors (recently cleared off all debt & waiting for a missed payment error to be removed) we were waiting for our credit files to update to reflect these recent changes so that we can get an AIP and put an offer in.

Well I spoke to a broker today who advised that we should try for a AIP with Halifax who leave a 'soft footprint' and if we get accepted then we can at least put an offer in, rather than risk loosing the house.

And we got accepted :beer:

However the rate is high 5.69% and have to pay a product fee of £999. On a two year fix.

Looking at Halifax's website they offer a 2 yr fix at 3.79% with 0 product fee. (Hence wanted to go to them)

So have we got this rate/deal because A) it's through a broker it's because of our rating C) it's shared ownership or D) all of the above.

And if so can we get a better deal when come to do a full mortgage application?? (When the credit reference file will be up to date?)

I will be speaking to the broker tomorrow but would appreciate any advice, including what to say to the broker!

Thanks so much

ACG

Dont worry about that.

Brokers and estate agents play a little game...
The estate agents want you to have an AIP even if you know you dont need one. So brokers go to a lender who do soft footprint DIPs (Which mean very little) to keep the estate agents happy.

Its just something that shows the estate agent your potentially ok for the money, it not necessarily the deal you will actually go for.

Ktaylor86

Thanks!

So tomorrow when I speak to the broker should I say that I'm pleased we have the AIP/DIP (not sure of the difference!) but when comes to the actual deal we are hoping to get a better rate than that!

Thanks

ACG

Tell the broker what you have seen.

As a broker i would want my clients to tell me what they have seen. I then know what im up against. You might not be eligible for it for whatever reason but your broker can discuss that with you.

Ktaylor86

Ok sure, will do.

I did say that I had looked at Halifax online but will give specifics.

Thanks

kingstreet

What's the loan to value?

The only 5.69% I can see on the Halifax affordable housing list is 90%, so do you have only 10% deposit?

That is the reason the rate is higher.

As mentioned ad-nauseum on here, the Halifax DIP is less reliable than others because it is only a soft search and more people are turned down at full application instead.

If you have no adverse credit at any address in your recent past, you should have no problem with other lenders with lower rates.