multiple AIPs and the Co-op bank

cluelessoncanvey

Hi first time buyer am using this site and the First Time Mortgage Guide 2015 as my guide.

The first thing I did was go to see two banks to see how much I could borrow (HSBC & Halifax). They both gave me AIPs. Didn't know what they were at the time, all I knew was to ask for soft searches so as not to affect my credit rating (although an EA on the phone today reckoned too many soft searches do as well, but most of the time they aren't taknig my full details so should be ok, the calculator on here for instance).

ANyway so started looknig around mortgage brokers to see what is the best deal, spoke to about 6 so far. Only worry is L&C today have sent me a Decision In Principle when I didn't ask for one, from what I understand now I have 3 when I decide which mortgage to go with it's going to affect my credit rating. How long til it self repairs and how much of a problem is this?

Slowly going through the list MSE's calculator gives you of the best deals, first one loughborough don't do flats, second Leek take too long, Co-op Bank have got a good rep, have a set up fee (£1679) but skipping all the unknowns like the above takes you to Tescos (a post on here says don't use them!) then Co-op. My concern with the Co-op is they nearly went belly up last year, how safe a bet are they and how would that affect your mortgage if they did collapse?

Malmo

The below is just plain wrong. No lender can see soft searches or consumer enquiries on your file and therefore cannot use such data to internally credit score you as a borrower.

although an EA on the phone today reckoned too many soft searches do as well

Having 1 or 2 hard searches, which are visible to lenders, won't be a big deal, but having too many carries the risk of being construed as a red flag to lenders.

Have you obtained your credit reports from all 3 Credit Reference Agencies (Experian, Equifax & Noddle/Callcredit)?

What are your circumstances? Age? Purchase price? LTV? Do you want a fixed rate (for how long?) or variable? What negative factors, if any, do your credit reports show?

cluelessoncanvey

I haven't obtained any credit reports yet, you obviously think I should!

I'm 43, 44 in a few months. £110,000 is the most I can afford with 10% deposit. FIxed rate sounds better? I'm still learning, but as rates are at or near a historic low, makes sense they are going to start going up.

As I said haven't had a credit report done yet, although everyone I speak to says I should be alright. Have a credit card - Halifax Clarity - as its recommended on here for the best foreign exchange rate. Only use it when on holiday and pay off as soon as I get back. I have multiple bank accounts, as ISAs were rubbish for saving so used current accounts to stash money (TSBs 4% for instance) and opened up a new current account with barclays a couple of months back to then transfer to yorkshire to get their £150 transfer incentive, but the Yorkshire lady knocked me back on the phone as I couldn't give her a good enough reason what I wanted the account for (was only going to use it temporarily to get the incentive, didn't say that obv).

It's getting confusing as well as looking at the best buy calculator here, whats on offer is getting worse whenever I look on another day, so thought interest rates were going up, but a quick search seems to indicate they only change monthly, so is it just different offers appearing and dissappearing with the various lenders?

Malmo

I haven't obtained any credit reports yet, you obviously think I should!

...

As I said haven't had a credit report done yet, although everyone I speak to says I should be alright

Obtaining all 3 credit reports is a prudent step to take prior to any interaction with a lender and it is the general advice you will receive on this forum.

I'm 43, 44 in a few months

On the assumption that you want a term (say 25 years) that takes your borrowing into retirement, then lenders will likely want to know how the loan will be repaid and serviced (for example, will your pension income be sufficient?).

It's getting confusing as well as looking at the best buy calculator here, whats on offer is getting worse whenever I look on another day, so thought interest rates were going up, but a quick search seems to indicate they only change monthly, so is it just different offers appearing and dissappearing with the various lenders?

Lenders change products and their terms all the time as I'm sure a broker will tell you. It's not necessarily linked to what the Bank of England does centrally.

vaseand

L&C don't do a credit check when they give you a decision in principle.

Malmo

L&C don't do a credit check when they give you a decision in principle.

It is worth noting that L&C is a broker and such a AIP/DIP would be worthless, being based only on income / expenditure. Your credit history will still be checked by the lender, even if they don't internally score you.

vaseand

Malmo wrote: »

It is worth noting that L&C is a broker and such a AIP/DIP would be worthless, being based only on income / expenditure. Your credit history will still be checked by the lender, even if they don't internally score you.

Yes - I was referring specifically to the decision in principle that L&C hand out when you make an initial inquiry which is based solely on the information you give them.

cluelessoncanvey

Thanks, thats cool so I can have one more AIP when I decide best to go with. It's hard because rates seem to change all of the time. SO I could do my own AIP now but they may not be the best when I find a property. I know this is what a broker does.

I am also judging how good a broker is by the quickness of their responses to my initial queries, I don't know if this is reflective or not, but the two pay ones I enquired with got back efficiently - within a day, whereas L&C seem to take longer, when it suits them. One of the pay ones even rang me up to ensure I had got his email with quotes. My current thinking was if a pay one gets you a percent or so off it pays for itself when compared to the free ones is this correct? 1% is about £40 extra per month if I got my facts right. so £300 more one off would actually be cheaper. But all these whole market brokers do they not all look in the same pool of offers anyway? If I see one I like (for instance co-op) can i then tell that to the broker and use them anyway, or does it not work that way?

Malmo

At this point, you'd be advised to have this thread moved to the Mortgages & Endowments board as you'll get useful insight from the contributing brokers on there.

As a customer / client, my view is that L&C are less likely than a smaller and/or local outfit to be able to offer a personalised and efficient service as they'll have larger case loads.

If you decide to proceed with a fee based broker, then ensure that their fee is only payable upon a successful mortgage offer or even completion (when you get the keys).

But all these whole market brokers do they not all look in the same pool of offers anyway?

Brokers may be directly authorised by the FCA or may be appointed representatives of mortgage networks (like Stonebridge or Intrinsic to name a couple), which are FCA authorised & regulated. These networks offer brokers an operating structure & access to the lending market through mortgage sourcing software like Mortgage Brain or Trigold (and these sourcing systems may or may not have access to Direct only products).

Each network may have negotiated exclusive deals with certain lenders, so the deals may not necessarily be the same across all brokers, though they may access the same or similar lenders.

Have the fee based brokers provided you with their Initial Disclosure Document (IDD) or Terms of Business? A good broker will do this immediately when you engage them, outlining their service, fee structure & FCA details.

If I see one I like (for instance co-op) can i then tell that to the broker and use them anyway

You can ask the broker to look into it if you wish, but rates aren't the only criteria that influence which product is right for your individual circumstances. The arrangement fee should be costed in, as well as the follow-on variable rate (SVR) after a fixed period ends. You also must satisfy the lender's criteria, which the broker will research to determine if you fit their profile, before placing you with the lender. It is an industry where the provider chooses the customers it wants, not the other way around.

cluelessoncanvey

Thanks. I just read a recommendation on looking at your posts Malmo on another thread! When I started this thread wasn't sure whether to post it here (buying a house) or mortgages thread as they both seemed similar. As the mortgages thread at the time seemed to be full of remortgage stuff I chose this one. Don't know how I would go about getting it moved.

Have been some fee break down paperwork from a pay broker but I don't fully understand it yet! The two I got in touch with were recommended by vouched by, one with 20 positive reviews, the other 60 so unless they've been getting fake reviews put up they should be ok!

One of the reasons I like MSE quick mortgage calculator is because it shows setup fees as well. Anothergood one at the mo looks like the woolwich springboard fixed (whatever springboard means) at 2.99% until 30-6-18, £215 setup. May require 15% deposit and not 10% although the MSE gunk on it says Maximum LTV 95%

Malmo

You can post a new thread in the Mortgages board, title it appropriately and just refer readers to this thread by linking to it, so that everyone can review the context and history. Start the new post with the question(s) that you want answered.