Bit Confused Regarding Broker Advice

Smedders11

Hi all,

My wife and I are FTBs likely buying/offering in about two months, and we though that now is a good time to start the ball rolling, starting with a free broker.

I've just gotten off the phone with London & County, but it didn't quite go how I thought. I assumed that because we're pretty close to buying we'd approach the broker, they'd try and find us a suitable lender, and if we went with them we'd get an AIP from said lender. However, it seemed to be basically an affordability check, and we were advised to wait until AFTER we'd made an offer before we approach them, which was due to the fact that offers are withdrawn frequently. The conversation ended with them saying 'you can afford X', which we kind of already knew. They also said they'd send us their own agreement in principle.

I've few questions regarding this:

1) Is it right that we should wait until after offering? I thought the reasoning was that having an AIP strengthened your hand when offering. Having to offer, go through a broker, then fully apply seems like it may take too long and be off-putting to sellers?

2) Is their AIP really and AIP? I thought it came through a lender?

3) Not fully related, but when is it advised to get a formal AIP? We don't quite have the deposit (although as an AIP is an agreement based on 'if you have this, if your credit file is like that, etc.) and we're just paying off a credit card before applying. Is two months really too early?

Thanks

Thrugelmir

Smedders11 wrote: »

We don't quite have the deposit

Then there's little point in them doing any amount of work. The situation may well have changed for any number of reasons by the time you are ready to purchase.

Debtslayer

I don't see anything wrong with the information L&C have provided you, they've gone through affordability checks with you and advised how much you could borrow and are sending you an AIP. They can't do any more until you've got your deposit and have found a house you like, then they can approach lenders.
At least you know what sort of price range you can look at when you're ready to start looking.
I'm not really sure what else you expected to hear?
P.s As well as the deposit you will need to have saved enough for legal fees, survey etc.

Smedders11

Thrugelmir wrote: »

Then there's little point in them doing any amount of work. The situation may well have changed for any number of reasons by the time you are ready to purchase.

Makes sense I guess. I didn't really think that the relatively short timeframe would have put them off.

I've known some people get AIPs several months in advance, pending deposit. Thought now would be about the right time.

ACG

I am not a fan ofproviding a DIP/AIP/MIP until your offer has been accepted:
1) The lender of choice today, may not be the lender of choice tomorrow - resulting in another credit check.
2) Some DIPs show how much you can lend, weakening your hand when negotiating the purchase price.
3) They expire, so getting one today especially when you do not have the deposit in place means another may be needed when you do actually find a property and agree a purchase price.

csgohan4

ACG is right, my product with skipton is no longer available and their products are no longer competitive. They were at the time of application for me.

Hope your aware of how L+C operate and if your looking for service or have a complex credit history/ case your better off elsewhere

Smedders11

Debtslayer wrote: »

I don't see anything wrong with the information L&C have provided you, they've gone through affordability checks with you and advised how much you could borrow and are sending you an AIP. They can't do any more until you've got your deposit and have found a house you like, then they can approach lenders.
At least you know what sort of price range you can look at when you're ready to start looking.
I'm not really sure what else you expected to hear?
P.s As well as the deposit you will need to have saved enough for legal fees, survey etc.

I'm not complaining about them, it's just that it wasn't as expected. I can understand their aversion if it is because I don't have the deposit yet--I'll just re-enquire in a few weeks.

I've done plenty of affordability checks, and theirs was just as I expected. What I wasn't expecting was that I needed to have found a house before approaching them, because it seems like more hoops at what is usually a sensitive and stressy time.

What I was expecting was approaching a broker saying we have, say, £12,000 available as a deposit ( or will have in a month or so), we want a house no more than £120,000, and we want X, Y, and Z terms (overpayments, 5-year fixed). What can you recommend or offer? After which I'd have thought we pre-apply to that lender, get an AIP and apply when we find the house we want. Which is why I thought sellers expected or preferred buyers to have an AIP prior to the offer. It can't occur the other way round.

If my understanding is wrong then fair enough.


We've accounted for the fees and other costs. It's not like we're a few hundred away form our deposit, it's that we're suddenly getting a gift of £10,000, which increased our deposit and leaves some left over for the fees.

Smedders11

csgohan4 wrote: »

ACG is right, my product with skipton is no longer available and their products are no longer competitive. They were at the time of application for me.

Hope your aware of how L+C operate and if your looking for service or have a complex credit history/ case your better off elsewhere

I'm aware. We're an uncomplicated case I assume, too. I knew we wouldn't have a tailored service. I was just looking for some some lenders to get ready to approach. Better to get some legwork done.

ACG

Smedders11 wrote: »

What I was expecting was approaching a broker saying we have, say, £12,000 available as a deposit ( or will have in a month or so), we want a house no more than £120,000, and we want X, Y, and Z terms (overpayments, 5-year fixed). What can you recommend or offer? After which I'd have thought we pre-apply to that lender, get an AIP and apply when we find the house we want.

A broker can give you an idea of rates, but they change daily. You already know what you can get and you can already have an idea of the rates available as I assume you have looked at those on the lenders websites?

They will not go any further as there is no point, the deal could be gone tomorrow.

You have what you need which is an idea of what you can lend and how much it will cost. Once you have your deposit, some brokers will get you an AIP in advance others (I am one of them) would avoid it if possible for the reasons I mentioned above.

I had a client who wanted to make an application on Thursday, I told them I still needed one more bank statement before I could apply, I received it this morning. It has actually worked in their favour as the lender has altered their rates in the meantime. Thats just in a period of 2-3 working days. You are talking about 20+.

Smedders11

ACG wrote: »

I am not a fan ofproviding a DIP/AIP/MIP until your offer has been accepted:
1) The lender of choice today, may not be the lender of choice tomorrow - resulting in another credit check.
2) Some DIPs show how much you can lend, weakening your hand when negotiating the purchase price.
3) They expire, so getting one today especially when you do not have the deposit in place means another may be needed when you do actually find a property and agree a purchase price.

Missed this post.

Thanks for the advice. Seems like I misunderstood the process (to be honest I've been wanting to ask when to approach a broker for a while, but it seemed silly or obvious!).

Guess I'll wait until we've got the money and found the house!

Thanks all

Smedders11

ACG wrote: »

A broker can give you an idea of rates, but they change daily. You already know what you can get and you can already have an idea of the rates available as I assume you have looked at those on the lenders websites?

They will not go any further as there is no point, the deal could be gone tomorrow.

You have what you need which is an idea of what you can lend and how much it will cost. Once you have your deposit, some brokers will get you an AIP in advance others (I am one of them) would avoid it if possible for the reasons I mentioned above.

I had a client who wanted to make an application on Thursday, I told them I still needed one more bank statement before I could apply, I received it this morning. It has actually worked in their favour as the lender has altered their rates in the meantime. Thats just in a period of 2-3 working days. You are talking about 20+.

Thanks again. Will hold off