Is my FA correct or should I look elsewhere?

shamac

We have just started looking for a new house. Went to see a FA a couple of days ago, he has been recommended by a good friend. He said that he won't do any of the mortgage stuff until we find a house that we like, he told us how much we would be able to borrow.

I thought that it was better to get a mortgage agreed up to the point that the lender agrees to lend you up to X amount and then find the house-think this is called an Agreement In Principle (?). Surely that puts us in a better position to buy (nothing to sell, in rented) as we can move things much faster.

Who is right?

ACG

What happens if you do not find a property for 3 months? Youve had a credit search done for no reason as all.

I tend to do a factfind and have a look at the credit reports to make sure everything is in order and not make an application or credit search until they have found a property - unless the clients specifically request one for the benefit of the estate agent.

EDIT: If you go to an estate agent with an agreement in principle for a certain amount - guess what theyre going to push for when it comes to haggling on a price.

dunstonh

I thought that it was better to get a mortgage agreed up to the point that the lender agrees to lend you up to X amount and then find the house-think this is called an Agreement In Principle (?).

No point wasting credit searches and risk damaging your record with too many searches in a short period. They can be arranged very quickly when the time is due.

Surely that puts us in a better position to buy (nothing to sell, in rented) as we can move things much faster.

It delays nothing.

Dave_Ham

I agree with the above, although you will need to know the FA is responsive.

Many Estate Agents will not accept an offer these days unless they know you can progress. Whilst this is a selling tactic on their part largely, without an Agreement In Principle they are unlikely to accept your offer (will offer up their own advisor at this point)

If your recommended FA moves quickly and has enough information in order to achieve a suitable AIP quickly then great. If you call up and they are a one man band and on holiday, or they are difficult to contact; it may lead to stress.

Good luck

amnblog

Normally you would see a property a couple of times before you put an offer in.

A good time to get a mortgage agreement in principle would be between the two viewings.

witchy1066

Our MB did a fact find as ACG says, told us how much we could borrow and discussed mortgage options . also said to ring her if we had any questions, and once we see something, she will get the ball rolling
when EA asks us any questions about our position concerning a mortgage ,we just say , its all sorted with our MB
some EA have asked us if we would like to talk to their independent broker but we just politely decline

HTH

dunstonh

some EA have asked us if we would like to talk to their independent broker but we just politely decline

The vast majority of EAs do not have independent brokers in them. Most are tied agents. However, some= of those like to give the impression of independence. Unless it is an independent EA using real independent mortgage brokers, i wouldnt go near an EA broker. They have a dire reputation.

Wh05apk

Personally I would get an AIP done after the first meeting, then everyone knows what is possible, how many times have we had clients coming in stating "perfect credit.no problems" only to find when we AIP them it is declined, not always due to credit, but possibly lack of? it can then take weeks to resolve.

Surely for the sake of a credit footprint it is better to find out up front, rather than after having put in an offer? I think too much emphasis is put on leaving "footprints" within reason (2/3) the negative effect is negligible?

beckysbobbles1

Your FA is indeed correct.

You can not actually process a mortgage application unless you have a property to set it against.

Basically they can do the fact find to agree provisional lending figures but until you find a suitable property, agree the deposit and confirm the LTV and indeed complete the actual application (credit search and affordability) then you will not know for sure if you will get the mortgage.

Enjoy looking at properties and keep your FA informed.

Eve1975

My partner and I have just put an offer on a house without the mortgage AIP sorted. We did not expect to find a place so quickly and my financial advisor is on holiday until the end of the month! We explained this to the estate agent and the vendor is in no rush so happy enough to wait and has accepted our offer.

Of course I am slightly nervous about being declined a mortgage, but we have gone in lower than the amount the FA has said we should be able to borrow. So fingers crossed.

ACG

Im surprised your estate agents arnt jumping all over that to try and get you into their broker!

I suppose really there is no set way, its down to the broker and client and to some extent the estate agent. Ive had to do a DIP before now just for my client to be able to go and see a property the estate agents were having none of it without one but i always prefer to hold off until its required.