"Soft" mortgage in principle - is it definitely good enough?

hiohaa

I'm a first time buyer. I bank with Natwest, so went online and followed their mortgage in principle online process, which is a soft credit check. 
After the 8 steps completed, it said I can successfully borrow what I want, which is £212753 on a 250k property value. I called them up to proceed, and she said, the next step is for me to find a house and have an offer accepted, then come back and continue to proceed with the application. 

Now, the details i put into their MIP online was all correct, won't change, i didn't "low ball" it etc....credit score on my last MSE credit club report was 856. 0 missed payments on anything since day 0, etc...  since the day of that report i've significantly reduced the balances on my credit balance and am therefore expecting an improved score in next months report. Anyway.......

Can i be rest assured that if Natwest say online that I can borrow that amount, that when it comes to applying for the mortgage, I should be alright? 
My worry is this - what if I put an offer in, then apply for the mortgage, and for whatever reason, they can't lend the money? Can the owners of the property sue me for any reason because they accepted an offer and then I couldn't get a mortgage?

SuperHan

There is a risk, as they haven't done the full checks. But chains fall apart all of the time for this very reason. The buyers would have no recourse against you provided that you don't exchange before getting your full mortgage offer (which your solicitors would make sure didn't happen!).

AdrianC

hiohaa said:

I'm a first time buyer. I bank with Natwest, so went online and followed their mortgage in principle online process, which is a soft credit check. 
After the 8 steps completed, it said I can successfully borrow what I want, which is £212753 on a 250k property value. I called them up to proceed, and she said, the next step is for me to find a house and have an offer accepted, then come back and continue to proceed with the application. 
...
Can i be rest assured that if Natwest say online that I can borrow that amount, that when it comes to applying for the mortgage, I should be alright?

Simple answer: Not necessarily.

It may well be that all you've done so far is the most surface-level "Is this person vaguely credit-worthy for this, and is their income sufficient?".
OTOH, it may well be that they already have all the info they need for it to be a "proper" AiP, since you're already a customer and they have access to all your history via that relationship.

Either way, the full mortgage application depends on the property itself - do they want to lend that much against THAT property?

My worry is this - what if I put an offer in, then apply for the mortgage, and for whatever reason, they can't lend the money?

It's likely that any EA will ask you to meet their own mortgage broker anyway. That's partly an attempt to sell their own services, and earn more commission from you, of course...
But what's the worst that'll happen? You waste half an hour.
What's the best? You get a better deal.

Can the owners of the property sue me for any reason because they accepted an offer and then I couldn't get a mortgage?

Nope. Until exchange of contracts (months after the offer), there is no obligation to purchase, and either side can walk away at a moment's notice with no comeback from the other.

iwb100

First, you have a mortgage in principle. This is absolutely enough to go and offer on a house. You cannot get anymore than this because for a full mortgage offer you need an actual property for them to value. So you’ve done all you can at this stage. Assuming you have documentary proof of your MiP since when you offer an EA will request it?

An MiP is no guarantee you will receive a full offer but everyone knows this. You might end up in the hands of an underwriter, your house you offer on may be unsuitable for a mortgage or not valued high enough...loads can happen. But you are ready to put offers in and start the process.

Id recommend using L&C as an online broker when you come to your actual mortgage. You might find a better rate. Do not use EA linked brokers...ever. You have an MiP but you can still find out if there is anything better around, you can use your MiP to prove to an EA you are proceedable but still go elsewhere for a mortgage in the end. 

grumiofoundation

iwb100 said:

Id recommend using L&C as an online broker when you come to your actual mortgage. Why? You might find a better rate. Which is it yourself or L and C? Do not use EA linked brokers...ever. Why not 'ever'? 

See above - your comments seem both definitive and contradictory to me? (rare combo!)

Fishoutofwater

We just moved house and ported with NatWest. We got the DIP and then did the full application the next day. We had the offer through on the 4th day. So at least if you do get turned down you should find out pretty quickly. 

steampowered

Please don't go straight to Natwest just because you have a current account with them. There is no benefit to doing this. You don't get a better rate just because you are an existing customer.

Do have a play around with the MSE mortgage best-buy tool at https://www.moneysavingexpert.com/mortgages/best-buys/.

You would generally have a formal mortgage offer in place, and all checks completed, before your conveyancer exchanges contracts. 

You are under no legal obligation to proceed with the purchase until contracts have been exchanged. You can withdraw at any time until that point. Having an offer accepted has no legal significance.

iwb100

grumiofoundation said:

iwb100 said:

Id recommend using L&C as an online broker when you come to your actual mortgage. Why? You might find a better rate. Which is it yourself or L and C? Do not use EA linked brokers...ever. Why not 'ever'? 

See above - your comments seem both definitive and contradictory to me? (rare combo!)

L&C are recommended by MSE itself...and are free. You can use them and still do your own comparison site searches. 

EA brokers tend not to be whole of market...and don’t always act in your best interests. 

grumiofoundation

iwb100 said:

grumiofoundation said:

iwb100 said:

Id recommend using L&C as an online broker when you come to your actual mortgage. Why? You might find a better rate. Which is it yourself or L and C? Do not use EA linked brokers...ever. Why not 'ever'? 

See above - your comments seem both definitive and contradictory to me? (rare combo!)

L&C are recommended by MSE itself...and are free. You can use them and still do your own comparison site searches. 

EA brokers tend not to be whole of market...and don’t always act in your best interests. 

L and C are not recommended by MSE (MSE don’t ‘recommend’ any companies/products).

So rather than ‘don’t use EA brokers - ever’ you mean - check EA brokers are getting you the best deal (as you also have to do for L and C). 

Out of interest what would an EA broker do to act out of your interest? They want the house sale to complete or they lose cash no? 

iwb100

grumiofoundation said:

iwb100 said:

grumiofoundation said:

iwb100 said:

Id recommend using L&C as an online broker when you come to your actual mortgage. Why? You might find a better rate. Which is it yourself or L and C? Do not use EA linked brokers...ever. Why not 'ever'? 

See above - your comments seem both definitive and contradictory to me? (rare combo!)

L&C are recommended by MSE itself...and are free. You can use them and still do your own comparison site searches. 

EA brokers tend not to be whole of market...and don’t always act in your best interests. 

L and C are not recommended by MSE (MSE don’t ‘recommend’ any companies/products).

So rather than ‘don’t use EA brokers - ever’ you mean - check EA brokers are getting you the best deal (as you also have to do for L and C). 

Out of interest what would an EA broker do to act out of your interest? They want the house sale to complete or they lose cash no? 

They list them as one of their top pick mortgage brokers...

An EA broker wants the deal to complete...yes...do they prioritise you getting the best deal always?

Thrugelmir

hiohaa said:

Can i be rest assured that if Natwest say online that I can borrow that amount, that when it comes to applying for the mortgage, I should be alright? 

In principle yes. There's always the caveats that there might be something in your credit history that a doesn't like, that your income in someway is questionable or simply that the lender has tightened down on internal criteria.