Mortgage in Principal - what we need to show

littlewillow87

We are first time buyer & going to put an offer in a bit of a rush (we're looking at buying a flat in Edinburgh). We haven't spoken to a bank/ broker but we just found a flat we really love, it's a repossession they're very keen to sell asap so we'll have to be quick.
To be able to put an offer, we'll have to get Mortgage in Principle and here are my questions:
- Which documents we need to show to get MiP?


- How long it takes to book an appointment and get MiP?
- Would they do credit check on us when we get MiP and does it affect our score?
- We will try to get an appointment with HSBC to get a mortgage in principal because we're using their banking services at the moment so it may be easier to get MiP from them, but we're not sure we would apply for a mortgage with them, is it ok?




Do we need to use the same mortgage provider when we do real mortgage application? (and should we?)


Our situation: My husband's salary is 42k, I am staying at home mum (we have a small baby), working few hours a week (it works out probably about 1.5k - 2k annually. We have about 45k deposit given from my parents.
We're looking at a flat quoted Offer over £195k and we plan to put an offer £197k
That means we'll have 152k loan (about 3.5 times our anual income)
My husband thinks he has good credit ranking, no missed payment, he only applied for a credit report today to make sure it's ok.


Do you think that we will be ok in getting a mortgage?
Many thanks. Any advice is really appreciated.

ACG

A MiP (more commonly known as a DIP - Decision in principle), can be arranged in a matter of minutes. You do not need documentation at that stage as such as its all done by computer.

99% of DIPs do have credit scoring yes. The odd lender does a soft footprint which does not show and some do not at all (typically these are very small lenders though).

HSBC are unlikely to be quick, my mate applied there in mid December, it took 2 weeks to get an appointment and he is due to complete next week - i put an application in for a different client mid feb and they completed last week.

You dont need to use the same lender as whoever you do the DIP with but why do a DIP with one lender and then apply elsewhere? More work.

Impossible to say as we have 2 sentences to sum up your circumstances but assuming all is fine then yes you should be ok.

littlewillow87

ACG wrote: »

A MiP (more commonly known as a DIP - Decision in principle), can be arranged in a matter of minutes. You do not need documentation at that stage as such as its all done by computer.

99% of DIPs do have credit scoring yes. The odd lender does a soft footprint which does not show and some do not at all (typically these are very small lenders though).

HSBC are unlikely to be quick, my mate applied there in mid December, it took 2 weeks to get an appointment and he is due to complete next week - i put an application in for a different client mid feb and they completed last week.

You dont need to use the same lender as whoever you do the DIP with but why do a DIP with one lender and then apply elsewhere? More work.

Impossible to say as we have 2 sentences to sum up your circumstances but assuming all is fine then yes you should be ok.

Thank you very much. The reason we asked if we need to use the same lender because we're in rush to put an offer in. So we're afraid we haven't had enough time to consider all the deals. We just need the DIP first to put an offer - and then do the research on mortgage deals more carefully later.
Which lenders do you recommend? or which lenders can give us a DIP asap? (we want to find a solicitor tomorrow and put an offer immediately)


Should we find a broker ? Does this make things easier?


Also the agent asked us to speak to their financial advisor - is it necessary? Any advantage /disadvantage to use their financial advisor?

ACG

I cant recommend any lenders on a forum, as advisors we need to have factfinds with all your info on before we can do that - even if it is just a DIP you want.

When i say DIPs are instant, i mean on our (brokers) systems. Im not sure if its the same if you apply over the phone/internet with a lender.

Having a decent broker can help to speed things up as they may have the relationship with a lender and can call in a favour etc or they know the systems so can make sure everything is sent to the underwriter ready and waiting.

Im not a huge fan of using a broker that works for the estate agents your dealing with. They are paid by the agents and their business comes fromthe agents... whos interests are they going to have at heart?

Sometimes they do insist on it so they can see proof of deposit and DIP, sometimes they insist on it so they can get the sale...

Dave_Ham

Ok, adding on to your situation; you are a first time buyer and buying a repo comes with weighty additional risk.

Do some research on buying a repo, or ensure you engage an experienced broker and repo experienced solicitor.

Do not use the EA broker and/or solicitors or your position is way to easily compromised.

Typically first time buyers and repo properties do not mix well.

littlewillow87

Thanks ACG, I have now got DiP from HSBC and have just put an offer this morning. If my offer is accepted - I will be legally in a binding contract. (we're in Scotland. Scary)
Thanks Dave Ham for pointing it out. I didn't think about that before. I've just done a quick research for repo issues, and see that most of the issues are the condition of the property. In my situation, the flat is advertised by a selling agent (not an auction). We have visited the flat and it was in very good condition, only 8 years old flat, we have also received a Home Report showing that the flat doesn't need major repair (only a small bit of damp because one door wasn't shut properly but I guess it will be gone if we fix the door).
We have set a date of entry on 10th May, giving us 8 weeks to get the mortgage.
Could you think of any other issues which may occur in buying this repo? Thanks a lot.