First Time Buyer - Effect On Credit?

Mxty

Hi MSE people,

So I will soon be embarking on the journey of buying my first house.

I've pretty much got my deposit saved and I'm aiming to go for a 95% mortgage.

I went to my bank, Halifax, about it, and they supplied me with a certificate that tells me how much they will loan me and has an expiry date. I believe this is an agreement in principle? But I may be using the wrong terminology so please correct me.

It wasn't exactly what I was after as due to my "A2" credit score they would only allow me to have a 90% mortgage. So I got in touch with YBS and explained my situation and my credit rating / expenses etc, there of course eager to get me in to talk to them more and look at my out going to give me something more concrete, again another agreement in principle I believe.

However, I'm worried as the advisor at Halifax told me not to do to many and to leave it 3 months or so before doing it again as it can have an adverse effect on credit score, was he just trying to get my business? Or should I wait a while before going to YBS, which would delay my plans of course and be quite inconvenient.

Is there any advice out there?

Lokolo

Why don't you use a broker?

An agreement in principle may leave a mark on your credit file, doing too many requests for credit can look bad.

bigfoot371

Speak to a free broker like London and Country or Habito. They will do one search for an AIP and provide you with viable options for your situation.

Mxty

I've considered it, would you suggest it's a better idea than approaching directly?

nmjams

Similar situation as i was in.
I had an AIP with Nationwide who did a hard credit search, it expired in Sept. Had offer accepted on a property last week so decided to go to an independent mortgage adviser.
I feel much more confident knowing that there is someone dealing with it that doesn't have the banks interests at heart. if you do decide to speak to one and it's someone local, make sure they aren't part of an estate agent firm.

Mxty

I believe after a bit of looking it had a soft impact on my credit score, so I should be fine to get another one either potentially using a broker?

ST1991

Can recommend using a broker. Ours found a deal that was the best for us over 24 months fixed. Although the monthly cost wasn't the cheapest, it didn't have a product fee like others, which worked out the same overall without having another upfront cost.

Apparently, (im not sure how much truth is in this, but it certainly made me feel better) although the search can affect your credit - when they look to actually give you the official mortgage offer they will take into account any previous approvals for a mortgage and not look badly on them.

bigfoot371

Use a broker, they will do the shopping around for you and give you the best few deals on the market available to you. They will manage the application progress and do all they can to progress it and fend any questions the banks have.

anto164

I did the same - Went to Halifax for an AIP, however this was just because i had opened a couple of bank accounts within the last 2 months with them, and that i had a couple of long standing accounts with them.

once i had an AIP, i used that as proof that i was in a proceedable state, then went to a broker instead for my full mortgage application which found us a much cheaper deal.

divadee

I can highly recommend London and country. Got us a great deal. And it saves going direct to lots of different providers.

always_sunny

I have also used L&C and it was a fairly straightforward process, if there're brokers and they're free and "no detriment"* to you why not use them?

*I bet someone will come up with reason why a broker shouldn't be used!