Multiple DIP's - worth shopping around?

YorkCityLuke

This is my first post to the forum, and my first attempt at home buying, so please excuse my relative ignorance. I have had a look through previous threads but can't find an exact answer to my question, so here goes.

My partner and I are buying our first home in Edinburgh, it's all very stressful as you might imagine, but we have made a successful offer on a property and are now trying to arrange a mortgage.

We have used a mortgage adviser to help us with this process, and we got a decision in principle before making the offer to make sure it was affordable. The adviser found us a 30 year mortgage with a fairly poor interest rate of 2.64%, but we can pay it if needs be and our circumstances are complicated (in that my income is largely from self-employment and a stipended PhD position, which most places simply do not like).

ANYWAY, my question is, is it worth shopping around still? I only ask because I called Post Office money on a whim because they offer a much better interest rate, and they did an 'affordability check' which strongly suggested we could get a 2.07% mortgage. I didn't go ahead with a full DIP/ application because I heard it can negatively affect your credit, but is this something worth doing? Is there a chance the mortgage adviser didn't see/ explore this deal, or is it too good to be true?

Any help would be appreciated, it is causing me some consternation.

ACG

Not many lenders will accept stipend income.
Also, are you looking at the rate or the deal? The rate could be 1% but if the fees are £5k and you are applying for a £100k mortgage, it is probably better to pay 2% or possibly 3% on the Mortgage if it has no fees.

If you need the stipend income, your options will be limited which may mean it costs you more.

YorkCityLuke

Hi!

Thanks for your reply. I'm really looking at both rate and deal in sum (i.e. the initial repayment cost over 2 years), but both the 2.64% currently on the table and the 2.07% I'm looking at have zero fees, so the second is preferable in any case.

I'm basically ignoring my stipend, but I do also have some income from my self employment. My partner has a solid wage. I called the provider offering 2.07% regarding our possible eligibility, and they seemed to think there should be no issue with it. We both have good credit too.

Anyway, I suppose my question was really: is it possible I could get a better deal by going directly to the provider, rather than the deal my mortgage adviser has found? Is it worth pursuing that possibility or is it only likely to damage my credit rating by having another check on it?

ACG

You do not need to do credit checks to assess how much you can get.
You just need to call the lender up, run your concerns by them and let them ask any additional questions and then put it through the affordability calculator.

There is no definitive answer in which is best.

You might get a good broker or a bad broker.
You might be more than capable of placing the case yourself.

If you are confident you can get it through with the lender you have found, go ahead with that? If it gets declined, it may affect future applications.

There are times on this forum I suggest people can do it themselves and other times I think it is definitely a case for a broker. I think yours will depend on whether you can get it to pass affordability or need the quirky incomes. Also, having a broker in theory should make it less stressful as they should fill you with confidence.

A brokers job is not just a price comparison service. We are there to manage everything. Most people when purchasing would rather go with an easier lender even if it costs a little more because it can be stressful. Your broker may be using a more relaxed lender for this reason? Although I suppose that should have been discussed.

FTBuyerGlasgow

2.64% is not a bad rate unless your LTV is sub 75%.

My first rate was 5.89% at 95% LTV, I just accepted it as the price I had to pay to get on the ladder.


Now I'm on 2.09%, it all worked out nicely.