AIP - before or after offering??

PRINCE$$

Hi,

Am trying to get my head around all this house buying stuff. I called London & County and they advised that they dont do a mortgage offer in principle until after we have made an offer as otherwise the deal we are approved for may expire and then we will have to be credit checked again which would harm our credit rating. Is this right? I gave them all the details and they have sent a letter saying that on the basis of this there is no reason why they wont offer us a mortgage. However we dont know what rate we would get etc, I was just told '6.5% or probably less'.
Is this how it normally works? Where just a bit worried about not knowing how good a rate we'll get and if there'll be any problem with our credit checks.
Thanks in advance, sorry if this is a silly question

herbiesjp

No - this is how L&C do it.

What you would normally do is speak to an adviser, and based on the information that you provide they will come back with some options/deals that meet your criteria.

You would then choose a deal, and then you could apply for an agreement in principle in order to make sure that based on the information provided the lender will indeed agree the mortgage. This agreemnt can take between 10 mins and 48 hours depending on which lender you opt for, and how the adviser has to submit the agreement i.e on-line, fax etc

A credit check will be carried out at this point

If it comes back as accepted, this does not reserve the mortgage rate for you. With most lenders, this only happens upon submission of a full application.


An AIP is normally better done before you offer, as at least that way you know that the mortgage is agreed up to the maximum level you are looking at

Any good whole of market adviser should be able to do that no problem.

Mr_helpful

PRINCE$$ wrote: »

Hi,

Am trying to get my head around all this house buying stuff. I called London & County and they advised that they dont do a mortgage offer in principle until after we have made an offer as otherwise the deal we are approved for may expire and then we will have to be credit checked again which would harm our credit rating. Is this right? I gave them all the details and they have sent a letter saying that on the basis of this there is no reason why they wont offer us a mortgage. However we dont know what rate we would get etc, I was just told '6.5% or probably less'.
Is this how it normally works? Where just a bit worried about not knowing how good a rate we'll get and if there'll be any problem with our credit checks.
Thanks in advance, sorry if this is a silly question

i would get your own report from equifax or experian L & C are partially correct about your credit file

PRINCE$$

herbiesjp wrote: »

No - this is how L&C do it.

What you would normally do is speak to an adviser, and based on the information that you provide they will come back with some options/deals that meet your criteria.

You would then choose a deal, and then you could apply for an agreement in principle in order to make sure that based on the information provided the lender will indeed agree the mortgage. This agreemnt can take between 10 mins and 48 hours depending on which lender you opt for, and how the adviser has to submit the agreement i.e on-line, fax etc

A credit check will be carried out at this point

If it comes back as accepted, this does not reserve the mortgage rate for you. With most lenders, this only happens upon submission of a full application.


An AIP is normally better done before you offer, as at least that way you know that the mortgage is agreed up to the maximum level you are looking at

Any good whole of market adviser should be able to do that no problem.

Thanks a lot for that, this is what I thought we'd be doing. Usually after you get the offer in principle does it go through no problem? Say it took us a month to make an offer, is the rate likely have changed, or another better one come up?
I think I may see another Mortgage Advisor, is it best to just look one up nearby? Is there anyway to tell if they're any good (aside from getting a fees free, WOM one which I will make sure to do)?

Thanks again for all the advice

herbiesjp

Afet the agreement in principle, as long as the supporting documents back up the details on the application there should be no problem. Then it will be subject to the survey.

Nearby or not, one good way of finding one that is good is via personal recommendation.

HTH

smartmove07

PRINCE$$ wrote: »

(aside from getting a fees free, WOM one which I will make sure to do)?

I am in a similar situation as yourselves. From the research I have been doing it's not always the best deal to go with a fee's free mortgage. Some other deals I have seen involve fee's upfront but mean a considerable saving in the long run. Just my opinion from what I have learnt so far.

herbiesjp

I think the OP was taking about fees free advisers as opposed to fees free deals

smartmove07

Oops, my mistake

herbiesjp

No problem - you made a very valid point though :T

PRINCE$$

Thanks to everyone for all their help :-)

I have as suggested spoken to a broker recommended by a colleague. He has recommended a 2 year fix at 6.14%, fee £1999. Does that sound like a good deal for a 100% mortgage, 2.7 times combined salary? We have no debt/credit problems.

herbiesjp

No one can say really, as no one knows your circumstances or any of the figures you are looking at

The fee seems on the high side though