Please help - Making offer with no DIP in time - Agents insisting need one first?

Midnight_Tboy

Hi guys, wondering if you can please help with something urgent.

So we currently rent (council house), but I've been looking at buying our first home, which is not far away from were we live, which we saw advertised by Manners & Harrison estate agents.

We'll be first time buyers, so quite naive to this and unsure of full steps involved and don't want to be hit with unnecessary fees etc.

We're looking at around 40k deposit, on a 110k house, so LTV of around 64% or so.

So...after viewing a few houses, we saw this house at the end of last week, and then the other half took a second viewing on Monday. On the monday, I popped in on work break to Nationwide to see about beginning the steps to apply for a mortgage, however was unable to be met due to the people having meetings on legislation changes etc and soonest I could be seen would be in 2 weeks (Fri 11th to be precise). I'd shopping around for 5yr fixed deals on all the main banks/society mortgage pricing, and Nationwide seemed to be the best offering 5yr fixed (around 64% LTV) for around £335 per month (3.09% for the 5yrs), with £499 in fees.

Anyway, we were looking at making an offer but before that point the estate agent rang us up asking if we were interested after the 2nd viewing, and that some offers had already been made at the asking price etc.

Long story short, I've discussed with them the price we can go to for the offer, offering slightly above asking price, however they said we need a DIP before they can submit/accept any offer.

So explained that the soonest I could be seen was Fri 11th by bank, and the lady was along the lines of "oh we could possibly speed it up by getting a DIP in through their own person....so basically, I'm booked in to see one of the estate agents own mortgage advisors tomorrow morning, so of course need to get printouts of info and ID etc ready.

The sceptic in me though is wondering, if this is some kind of way to pressure people in only going for mortgages through themselves? I was under the impression you could make an offer beforehand with having this?

My other concern, I read on their website, that there "may be a broker fee of up to £550 for this. Does that mean they would look to charge a fee even on the very early stages, during tomorrows meeting? Or is this only if I go and say yes, thats the exact mortgage I want (ie in the final stages of applying)? I'd be surprised, but obv pleased if they manage to find something thats a fair bit cheaper for me, however I couldn't find close to Nationwide in manual checking myself...so if they turn around and say the best is Nationwide (or somewhere that is the same rate/overall 5yr cost basically), but we'll be charging you up to £550 for confirming what I already knew and them wanting to basically leach me for the extra.

So basically....am I ok to go ahead with tomorrows meeting for the DIP etc (and they wouldn't try and force anything at that point in time until a final price is agreed), and then to still attend the Nationwide appointment I'd already made, and afterwards say "sorry but I'm going with nationwide"?

As far as the Mortgage amount of around 70k I need, going through the mortgage calculators (5/5 Noddle Rating, plenty savings, cards are paid off full each month etc), I can't see the agreement of a value being an issue itself for what it's worth, and the websites indicated I would be offered in region of 40k more than I'm requesting, but obv don't want them to try and trap me into paying an unneccessary fee of that much

Hope that has been explained clearly, and apologies if not, as all this housing mallarky is very new to me

Thanks for your time guys and gals

ACG

I skipped through the last couple of paragraphs but thought i would answer aanyway...

The EA has suggested you see their broker because you cant go with your chosen lender for another week or so. You dont have to use their broker or any broker, but if a property has had offers accepted already and you want the house then you either have to find a new lender who can see you or go via a broker.

I really do not like EA or the majority of their brokers but in this situation i can see why they are suggesting their own brokers. It also does not sound like they are trying to blackmail you into using their broker...

You can go to whoever you like but i cant see it doing you any favours getting a DIP with one company/broker and then having another credit search done direct - 2 credit searches for 1 mortgage/property.

Personally i think you might just have to go through a broker (theirs or another) or find another lender. Its unfair of you to ask someone to hold back on moving forward by 9 days... its not a day or 2.

Midnight_Tboy

hi, thanks for the reply.

We kinda know the people who own the home currently, they would have sold privately had we realised they were selling beforehand but tied in with estate agents now.

They haven't accepted any offers at all yet (confirmed by the lady who owns house this morning when chatting), as they still have viewings coming at the weekend too, (they'd even been complaining to the EA that they were pushing some other people into the route of making the first lot of offers when they knew they still had viewings to come later). So basically it was the agency asking if I was interested after second viewing as they'd already began receiving offers for it coming in.

Am I right in thinking there is no actual credit search done on the day (ie tomorrow) and so should not need to have 2 searches done? I thought that was the point of being In Principle, that its based on the info and docs done.

Of course, if they can offer a cheaper deal then I'd be all for that, but don't want to pay that fee for no reason (and so wanted to check I wouldnt' be fixed into paying that when see them tomorrow), and as you say, of course ideally don't want to go crazy with credit searches on my account

Likewise I don't expect my offer would be accepted, if it is, until a week down the line when the final viewings have been done.

ACG

I think they are going to try and talk you into doing a DIP to ensure you pass a credit check.
If they do it with halifax then it is only a softprint and only you and halifax can see it, but to do that is a waste of time as its not worth the paper its printed on.

If you know the person are they happy to sell to you and wait a week? If so tell the agent you know them and have agreed between yourselves the purchase so to leave you alone for a week as doing an additional credit check may impact your actual mortgage application.

Midnight_Tboy

Thanks.....I've just done some searching, trying to get my head round all this, and yes, they do the credit check when doing a DIP/AIP.

I might have to enquire about the 'halifax' softprint thing.......as when I was speaking to the EA lady, she said something about dips saying one needed even if 'not worth paper they're printed on" (her words - tho on what context I'm not sure).

So as far as I can tell then however, the EA mortgage page saying "A BROKER FEE OF UP TO £550 MAY BE PAYABLE ON APPLICATION" basically I'm assuming that means we only have to pay that fee if we go ahead and proceed on a full application finalising at the later stage? After all, with it saying 'up to' there must be some sort of discussion based on what a charge would be.

Sorry I know I'm coming across dump,but last thing I want to do is walk into a £500+ fee for just popping into an office with my details when was reluctant to use them originally anyway

While we know the people, they're not friends as such, just neighbour acquaintances from several doors down. With them being a bit annoyed that the EA themselves have been pushing other people, when a batch of viewings are still expected, they will of course no doubt want to get the best they can get offerwise, as some may bid higher than us (we are 1k over the original asking price). The EA do know its only a few doors away, though don't know we've been discussing the house too

mrginge

They are mugging you off.

Midnight_Tboy

care to elaborate why Mrginge?

I am of course sceptical about the EA, my sister had hassle when trying to sell with them in the past too.

I'm searching for info at the moment, but by all accounts, if its still early days, nothing has been accepted by anyone, so I can't quite get why they want to rush me into getting their own broker involved.

I could of course understand, once the sellers have had the last of their visits/offers in, that they will be wanting to get things sorted fast from that point of course, but I guess from the very first conversation this morning with the estate agent "asking our intention because other people have already bid up to the asking price", has obviousl escalated this into feeling like a mad rush

Din85

We ended up with an EA broker (naive FTB) but to be fair, he did get us the mortgage we wanted, so the fee imo was worth it (£500.00).

They do not charge this fee for the dip though, they charge it upon application, so don't worry about being landed with a big bill for the dip !

It may be their policy, but you don't need a dip to make an offer, in fact I think the sellers might want to know if the EA where witholding offers just because you don't have a dip.

If it was me, I would go along, let them do a Halifax dip, in fact I believe nationwides dips are soft searches as well (dont quote me on that), so it won't do any harm, and won't cost you a penny.

It's then up to you to either continue with them, or find your own broker who perhaps charges his fee on completion rather than application, ask around for recommendations from friends etc.

Midnight_Tboy

Thanks Din85, very helpful, for reassuring me I won't get landed with a quick bill at the start

Yeah, it must be their 'policy' aka excuse to insist on a DIP beforehand, but devils advocate I can see why they might want to detract people who may mess them about.

Can you specify they do a softsearch dip then I take it? Seems the best way for now at least, so know what sort of figures they come up without risk of affecting my Nationwide one

ACG

If they try to dip it with anyone other than halifax (or another lender who does soft footprints) and you have no intention of using their broker i would ask them not to. Its a waste of a search on your credit file.

Midnight_Tboy

I guess I should make it clear to them from the offset that I'm only interested in a 'softsearch' for now. Can anyone confirm that Nationwide searches are also soft ones? Of course I'm open to if they can find me a cheaper deal then great, but I doubt they'll have much luck, and usually after an easy sell to people less inclined to shop around