Decision in Principle not accepted by EA

Fuzion

Thanks. They emailed me a letter called 'NOTIFICATION OF OFFER RECEIVED- SUBJECT TO CONTRACT' confirming my offer so at least there seems to be some progress.

AFF8879

I'm confused, are you sure what you have is an official "decision in principle" as opposed to the results from an affordability calculator? L&C are a broker as opposed to a direct lender as far as I'm aware, and they would have had to obtain a DIP from whichever lender they plan to apply to on your behalf. I'm not aware of any bank that provides a DIP without at least a soft credit search.

Fuzion

The wording is -

Following our discussion, we are pleased to provide you with an L&C Decision in Principle which will help you when it comes to finding and making an offer on a property. In assessing how much you could borrow, we use the affordability calculators of a number of major mortgage lenders. Please note that this does not represent a formal mortgage offer or guarantee of a mortgage as a credit score or credit search have not yet been carried out. Lenders will only carry out these checks once we know your exact borrowing requirement and are in a position to proceed.

csgohan4

AFF8879 wrote: »

Ok, makes sense. This isn't a formal DIP.

But you can get one easily enough as suggested, just fill in your details online on the HSBC/Halifax etc websites - takes 10-15 mins max - and you'll get a decision instantly and a certificate which you can print out and show to the EA you can get DIP online from almost any lender, just make sure when you do it states clearly they will do a soft credit search only as opposed to a full - so that it doesn't show up on your credit file.

Never ever show them the full DIP and do one for the sake of needing one.


Only do a DIP if it is the product and lender you will eventually be using otherwise it is a wasted 'search'.


The fact they have your full DIP also means they know what your ceiling of affordability and push you into a 'phantom' bidding war.


This is where having a broker comes in handy, pass them their details if they want proof you can afford a house at X price.


Quote them The property ombudsman code and in fact take a copy to them:


(Section 9c) Offers: The Code now explicitly states that ‘by law you cannot make it a condition of passing on offers to the seller that the person wanting to buy the property must use services offered by you or another party.’
(Section 10b) Financial Evaluation: A new section has been included to ensure agents understand that they ‘must put all offers to your seller client even if the prospective buyer has not been financially qualified at that stage.’

marksoton

AFF8879 wrote: »

I'm confused, are you sure what you have is an official "decision in principle" as opposed to the results from an affordability calculator? L&C are a broker as opposed to a direct lender as far as I'm aware, and they would have had to obtain a DIP from whichever lender they plan to apply to on your behalf. I'm not aware of any bank that provides a DIP without at least a soft credit search.

Fuzion wrote: »

The wording is -

Following our discussion, we are pleased to provide you with an L&C Decision in Principle which will help you when it comes to finding and making an offer on a property. In assessing how much you could borrow, we use the affordability calculators of a number of major mortgage lenders. Please note that this does not represent a formal mortgage offer or guarantee of a mortgage as a credit score or credit search have not yet been carried out. Lenders will only carry out these checks once we know your exact borrowing requirement and are in a position to proceed.

We've seen this before. I don't know how L&C get away with it. How can they give you a decision in principle when they are not the ones lending money.....It's wrong.

Surrey_EA

I can't recall ever asking a buyer to see a agreement/decision in principle document. They seem like a total waste of time to me.

Just because someone has a AIP/DIP does not make it any more likely a mortgage application will be successful.

sheff6107

Surrey_EA wrote: »

Just because someone has a AIP/DIP does not make it any more likely a mortgage application will be successful.

Well it should do, because it must mean they don't have any CCJs or debt agreements on their credit file.

Surrey_EA

sheff6107 wrote: »

Well it should do, because it must mean they don't have any CCJs or debt agreements on their credit file.

I can't recall exactly what is checked at AIP/DIP stage, but I have come across plenty of people who have had full mortgage applications rejected, despite having a AIP/DIP for the required amount.

kingstreet

As an example, Nationwide carries out a full credit score at DIP stage and this is the early section of the full mortgage application and you build on from it.

Only one credit search is carried out unless the time between DIP and full app is too long, then another might be done.

Provided the documents uploaded to the case match the inputs to the DIP, the offer will follow once the valuation is done.

The choice of lender for the DIP should influence the agent's view of its reliability.

Shakin_Steve

Barclays did a soft search for the AIP we got, no more than a generic identity check really.