I was told a DIP is not official and now I’m worried?

Firsthomehope

We have been given a DIP from Halifax and reserved. When I asked my mortgage advisor if this took into account my credit history and background they said yes and that they had done which I believe is a soft credit check on both of us (2 applicants)

she told me that I don’t need to worry about my credit issues because they have looked at that and they take into consideration the higher credit score which is my partner as well as looking at our credit history for three years.

However someone spoke to me today, not mortgage related and said that a DIP is only what a mortgage company could lend you and they haven’t done a full check on you. I’m confused because I thought it would be okay and now I am worried.

please be kind, I post quite a lot but I’m an incredibly anxious person and I am juggling a lot too 

AdrianC

A DiP is saying "Yep, we have no issue with lending YOU £X". It's not a full mortgage offer, because they need to take account of whether the property is good security for the money, too.

Do you bank with Halifax already? If so, they've got all the details they need about you.

greatcrested

What does "DIP" stand for?

In particular, the 'IP' part?

Firsthomehope

So we have already been assessed and they have agreed. I obviously expect a hard check when the mortgage application is submitted but they already know about any skeletons as said by my mortgage advisor.

Neither of us bank with Halifax no

Falafels

Firsthomehope said:

So we have already been assessed and they have agreed. I obviously expect a hard check when the mortgage application is submitted but they already know about any skeletons as said by my mortgage advisor.

Neither of us bank with Halifax no

The hard check will be on the property rather than your good self. They’re already fine about lending to you in principle, but they will need to make sure you’re buying something that is worthy of their investment. After all, it’s their money you’re going to be spending initially! 

No need to worry!

AdrianC

greatcrested said:

What does "DIP" stand for?

In particular, the 'IP' part?

https://www.youtube.com/watch?v=to0l73sMhew (sorry not sorry)

iwb100

They’ve agreed to lend you the money in principle. You earn enough and have suitable credit history. However, they will check further if they want to when it comes to the full decision and obviously check your chosen house is suitable security for their loan via a valuation. I don’t think you have anything to worry about so long as you can prove your information via payslips, proof of earnings etc if an underwriter asks for it and of course that your house is valued ok, 

Saga

iwb100 said:

They’ve agreed to lend you the money in principle. You earn enough and have suitable credit history. However, they will check further if they want to when it comes to the full decision and obviously check your chosen house is suitable security for their loan via a valuation. I don’t think you have anything to worry about so long as you can prove your information via payslips, proof of earnings etc if an underwriter asks for it and of course that your house is valued ok, 

I know at least two work colleagues who, despite receiving DIPs and were able to prove income and expenditure, were still turned down after the affordability checks. I think you need to be aware of that possibility.

onwards&upwards

Falafels said:

Firsthomehope said:

So we have already been assessed and they have agreed. I obviously expect a hard check when the mortgage application is submitted but they already know about any skeletons as said by my mortgage advisor.

Neither of us bank with Halifax no

The hard check will be on the property rather than your good self. T

That's not true.  The check on the property is the valuation and/or survey. 

The 'hard' credit check is on the buyer's credit histories, and there is always a possibility that they will see something they don't like and pull the offer, but this is rare.  OP the kind of things they don't like are defaults, late payments, payday loans, gambling transactions and CCJs. 

iwb100

Saga said:

iwb100 said:

They’ve agreed to lend you the money in principle. You earn enough and have suitable credit history. However, they will check further if they want to when it comes to the full decision and obviously check your chosen house is suitable security for their loan via a valuation. I don’t think you have anything to worry about so long as you can prove your information via payslips, proof of earnings etc if an underwriter asks for it and of course that your house is valued ok, 

I know at least two work colleagues who, despite receiving DIPs and were able to prove income and expenditure, were still turned down after the affordability checks. I think you need to be aware of that possibility.

At full decision stage anything is possible. I guess I was trying not to worry the OP too much. Because in reality it’s not worth worrying. To counter the negatives our last mortgage with HSBC all we ever sent was a single payslip each and proof of our deposit funds. Literally asked for nothing else. Not bank statements or anything. Decision took 2 days from application.

Saga

onwards&upwards said:

Falafels said:

Firsthomehope said:

So we have already been assessed and they have agreed. I obviously expect a hard check when the mortgage application is submitted but they already know about any skeletons as said by my mortgage advisor.

Neither of us bank with Halifax no

The hard check will be on the property rather than your good self. T

That's not true.  The check on the property is the valuation and/or survey. 

The 'hard' credit check is on the buyer's credit histories, and there is always a possibility that they will see something they don't like and pull the offer, but this is rare.  OP the kind of things they don't like are defaults, late payments, payday loans, gambling transactions and CCJs. 

Is the odd play of the Lottery (e.g. once every 6 months) going to count the same as a loan default or CCJ?