Mortgages with London & Country versus going direct?

freda

We are looking fora 5 year fix mortgage to purchase a new home. We have a DIP from L&C brokers for a mortgage of £270k max.

However, if I do the rough'n'ready calculators on (for example) Natwest and Barclays, they are showing that they would lend 'up to' £324k.

Is it worth me spending time calling the high street lenders to see if we can get a higher mortgage direct?

Thank you.

(I am fully aware of the affordability issues surrounding higher multiple of salary mortgages)

kingstreet

I would trust a broker to know what expenses to put in what boxes and you would have to be careful to ensure you have done the same.

Is it a flat or leasehold house? Have you included ground rent and service charges? Childcare? Student loans? Travel card/season ticket? Allowance for equity loan on HTB - EL on newbuild?

Just make sure you miss nothing out.

freda

Thanks Kingstreet

We don't have a property to move to yet, however I am looking to find what size mortgage we can get so that I can target our viewing to houses of appropriate value.

It is almost certainly going to be a freehold house with no ground rent or service charges, not HTB or newbuild, less than 60% LTV. We have no student loans, no season tickets, no childcare costs, no other debts - our expenditure in general is very low. I have years worth of accounts to work out our average expenditure on food and other costs if they ask.

ACG

Did you ask for a DIP for a certain amount?

It could just be that is what they have provided you with rather than the maximum.

freda

Thanks ACG

No, I asked for a DIP for the maximum amount they would be able to get us a mortgage for.

kingstreet

A broker would treat such a request with a degree of caution.

I know which lender(s) will lend more than others, but if you want the best rates, you may not want to take your mortgage with one of them. Often the better rates are offered by lenders who take a more prudent approach and who may offer less than those others.

Some lenders lend on "criteria" and others lend on rate.

freda

Hmm, good point kingstreet, the Barclay's 5 year fix is 1% higher rate than the best 5 year fix rate.

But I wonder why L&C didn't come up with a higher figure, given that I had put no restriction on it having to be the best deal.

I think I will spend some time doing my own research, as obviously an extra 1% for 5 years would be worth a couple of grand over the fixed rate period, not to be sniffed at.

freda

Another quick question - if I go to a couple of places direct, and maybe another broker, and request a DIP from each, will this have a negative impact on my credit file when it comes to eventually applying for a mortgage?

kingstreet

AFAIK L&C does not do a "DIP" it does its own basic affordability calculation.

A proper decision in principle involves a credit search and you do not want more than two in the mortgage application process.

It's going to depend on which lender(s) you talk to.

freda

Hmm, so what would you advise for getting a realistic overview of what we would be able to borrow, and at what rates, without getting lots of credit checks?

I understand the extra cost of a higher APR etc, and would obviously balance that off against our subjective perception of the value of a family home we want to buy.

lentrix92

From my recent experience, i contacted both L&C and went direct. I found that going direct was 'cheaper' in terms of a lower rate. (5yr fixed @ 2.94).
But just to point out , i was remortgaging and have a low LTV of 44%