MIP - how reliable / accurate is it?

annetheman

ACG said:

annetheman said:

ACG said:

K_S said:

holyrottweiler said:

Hi,
My DD is currently looking for a flat in London and she has received her MIP (Mortgage In Principle). We are wondering how accurate are MIPs?
She has provided her information (they are accurate - I double checked) to her broker and got her MIP through the broker.
Thanks in advance.

@hollyrottweiler To add to what ACG says above, also note that an 'MIP' is also issued by some volume brokers (for instance Habito) giving a borrowing figure based on some basic assumptions (or using the logic of one mainstream lender's affordability calculator), with no soft credit check done. Those MIPs are less reliable (imho) than that issued by a specific lender.

Good shout. If you have a DIP from a broker like L&C or habito, then its worthless. I was working on the assumption you have a DIP from a "propper broker" who would have looked over your credit reports or from a lender. 

I see how this is the case, but I found the DiP from L&C was close to that from an actual lender via my broker.

Certainly I needed the DiP for my affordability assessments as am using govt scheme, which also means the amount you can borrow decreases. I've never figured out exactly how it works proportionately but worth bearing in mind!

E.g. when I got my DiP from Natwest, it was for 186,000 for a "regular" product/mortgage, then went down to about 109,000 for a govt scheme mortgage with a specialist lender. Rates also increased by a factor of around x3. 

Thats an affordability calculator, not a DIP. 

A DIP is in essence a credit check (in full or part), some basic criteria questions and an affordability check. 

The Natwest DiP was a DiP, I have banked with them for over 20 years and they had all the info on file to give a relatively quick decision e.g. regular pay into my account, statements. They did a credit search and gave the 186K DiP within the hour.
L&C didn't do a credit check so I have no idea how they got it so close to NatWest's but as someone above said, it could be because I have a clean report/no surprises to throw a regular calculator off whack. For mortgage DiP with specialist lenders allowing govt schemes, I also underwent another credit check and got a DiP, which was wildly different from the "regular" mortgage one from Natwest (and L&C's). 

Separately i.e. not a DiP and not what I was talking about above - the Homes England affordability calculator demonstrated to me whether I would pass eligibility based on what I should borrow, rather than how much I could borrow. 

ACG

annetheman said:

ACG said:

annetheman said:

ACG said:

K_S said:

holyrottweiler said:

Hi,
My DD is currently looking for a flat in London and she has received her MIP (Mortgage In Principle). We are wondering how accurate are MIPs?
She has provided her information (they are accurate - I double checked) to her broker and got her MIP through the broker.
Thanks in advance.

@hollyrottweiler To add to what ACG says above, also note that an 'MIP' is also issued by some volume brokers (for instance Habito) giving a borrowing figure based on some basic assumptions (or using the logic of one mainstream lender's affordability calculator), with no soft credit check done. Those MIPs are less reliable (imho) than that issued by a specific lender.

Good shout. If you have a DIP from a broker like L&C or habito, then its worthless. I was working on the assumption you have a DIP from a "propper broker" who would have looked over your credit reports or from a lender. 

I see how this is the case, but I found the DiP from L&C was close to that from an actual lender via my broker.

Certainly I needed the DiP for my affordability assessments as am using govt scheme, which also means the amount you can borrow decreases. I've never figured out exactly how it works proportionately but worth bearing in mind!

E.g. when I got my DiP from Natwest, it was for 186,000 for a "regular" product/mortgage, then went down to about 109,000 for a govt scheme mortgage with a specialist lender. Rates also increased by a factor of around x3. 

Thats an affordability calculator, not a DIP. 

A DIP is in essence a credit check (in full or part), some basic criteria questions and an affordability check. 

The Natwest DiP was a DiP, I have banked with them for over 20 years and they had all the info on file to give a relatively quick decision e.g. regular pay into my account, statements. They did a credit search and gave the 186K DiP within the hour.
L&C didn't do a credit check so I have no idea how they got it so close to NatWest's but as someone above said, it could be because I have a clean report/no surprises to throw a regular calculator off whack. For mortgage DiP with specialist lenders allowing govt schemes, I also underwent another credit check and got a DiP, which was wildly different from the "regular" mortgage one from Natwest (and L&C's). 

Separately i.e. not a DiP and not what I was talking about above - the Homes England affordability calculator demonstrated to me whether I would pass eligibility based on what I should borrow, rather than how much I could borrow. 

Sorry, I am working from home and had my 3 year old daughter doing my hair (im a lad with pretty short hair...) when I replied to your message. I just seen the L&C comment and stopped there. 

The L&C is just an affordability calculator. I can tell most people what they can lend in a matter of seconds (thats not me biging myself up btw, its just most lenders cap at 4.5x income in the current climate). So the L&C calculator should be pretty accurate for the average person - but it is a calculator not a DIP (even though they pass it off as something - its a good sales toy to make people think they are further than they are to stick with them). 

You are correct about Natwest, theirs is an actual DIP. 

Just for the record, I have also had imaginary lipstick on, nails and eyes imaginary done and I have imaginary glitter in my hair  and "I look beautiful"... I cant wait to get back to the office! (after I wash the imaginary make up off). 

[Deleted User]

ACG said:

holyrottweiler said:

ACG said:

K_S said:

holyrottweiler said:

Hi,
My DD is currently looking for a flat in London and she has received her MIP (Mortgage In Principle). We are wondering how accurate are MIPs?
She has provided her information (they are accurate - I double checked) to her broker and got her MIP through the broker.
Thanks in advance.

@hollyrottweiler To add to what ACG says above, also note that an 'MIP' is also issued by some volume brokers (for instance Habito) giving a borrowing figure based on some basic assumptions (or using the logic of one mainstream lender's affordability calculator), with no soft credit check done. Those MIPs are less reliable (imho) than that issued by a specific lender.

Good shout. If you have a DIP from a broker like L&C or habito, then its worthless. I was working on the assumption you have a DIP from a "propper broker" who would have looked over your credit reports or from a lender. 

Eek. I did not realise that it was worthless. Does that mean these estimates are widely unreliable as well?

Not really, the affordability calculation should be relatively accurate. Although what they will probably be doing is just a 4.5x income multiple. If your daughter has a  lot of debt/commitments/kids or is reliant on bonuses/commission/overtime, they may not be the most accurate. 

No kids, no debt/commitments and single young professional in a secure job, so she should be OK. Bonus and state benefits are only 9% of her overall income so majority of her income is down to base pay. However, the 4.5x income multiple cap is a slight worry as she's just put an offer in and we'd need a mortgage around 4.8x of her income. She's got a large deposit though which would mean we are looking at 70% LTV which is decent. Do you think 4.8x is not possible under current climate?

Thanks for all of your help by the way. Incredibly useful.

ACG

Hi, I have just replied to your PM. 

rachlikeswinter

ACG said:

annetheman said:

ACG said:

annetheman said:

ACG said:

K_S said:

holyrottweiler said:

Hi,
My DD is currently looking for a flat in London and she has received her MIP (Mortgage In Principle). We are wondering how accurate are MIPs?
She has provided her information (they are accurate - I double checked) to her broker and got her MIP through the broker.
Thanks in advance.

@hollyrottweiler To add to what ACG says above, also note that an 'MIP' is also issued by some volume brokers (for instance Habito) giving a borrowing figure based on some basic assumptions (or using the logic of one mainstream lender's affordability calculator), with no soft credit check done. Those MIPs are less reliable (imho) than that issued by a specific lender.

Good shout. If you have a DIP from a broker like L&C or habito, then its worthless. I was working on the assumption you have a DIP from a "propper broker" who would have looked over your credit reports or from a lender. 

I see how this is the case, but I found the DiP from L&C was close to that from an actual lender via my broker.

Certainly I needed the DiP for my affordability assessments as am using govt scheme, which also means the amount you can borrow decreases. I've never figured out exactly how it works proportionately but worth bearing in mind!

E.g. when I got my DiP from Natwest, it was for 186,000 for a "regular" product/mortgage, then went down to about 109,000 for a govt scheme mortgage with a specialist lender. Rates also increased by a factor of around x3. 

Thats an affordability calculator, not a DIP. 

A DIP is in essence a credit check (in full or part), some basic criteria questions and an affordability check. 

The Natwest DiP was a DiP, I have banked with them for over 20 years and they had all the info on file to give a relatively quick decision e.g. regular pay into my account, statements. They did a credit search and gave the 186K DiP within the hour.
L&C didn't do a credit check so I have no idea how they got it so close to NatWest's but as someone above said, it could be because I have a clean report/no surprises to throw a regular calculator off whack. For mortgage DiP with specialist lenders allowing govt schemes, I also underwent another credit check and got a DiP, which was wildly different from the "regular" mortgage one from Natwest (and L&C's). 

Separately i.e. not a DiP and not what I was talking about above - the Homes England affordability calculator demonstrated to me whether I would pass eligibility based on what I should borrow, rather than how much I could borrow. 

Just for the record, I have also had imaginary lipstick on, nails and eyes imaginary done and I have imaginary glitter in my hair  and "I look beautiful"... I cant wait to get back to the office! (after I wash the imaginary make up off). 

This is adorable!

ACG

rachlikeswinter said:

ACG said:

annetheman said:

ACG said:

annetheman said:

ACG said:

K_S said:

holyrottweiler said:

Hi,
My DD is currently looking for a flat in London and she has received her MIP (Mortgage In Principle). We are wondering how accurate are MIPs?
She has provided her information (they are accurate - I double checked) to her broker and got her MIP through the broker.
Thanks in advance.

@hollyrottweiler To add to what ACG says above, also note that an 'MIP' is also issued by some volume brokers (for instance Habito) giving a borrowing figure based on some basic assumptions (or using the logic of one mainstream lender's affordability calculator), with no soft credit check done. Those MIPs are less reliable (imho) than that issued by a specific lender.

Good shout. If you have a DIP from a broker like L&C or habito, then its worthless. I was working on the assumption you have a DIP from a "propper broker" who would have looked over your credit reports or from a lender. 

I see how this is the case, but I found the DiP from L&C was close to that from an actual lender via my broker.

Certainly I needed the DiP for my affordability assessments as am using govt scheme, which also means the amount you can borrow decreases. I've never figured out exactly how it works proportionately but worth bearing in mind!

E.g. when I got my DiP from Natwest, it was for 186,000 for a "regular" product/mortgage, then went down to about 109,000 for a govt scheme mortgage with a specialist lender. Rates also increased by a factor of around x3. 

Thats an affordability calculator, not a DIP. 

A DIP is in essence a credit check (in full or part), some basic criteria questions and an affordability check. 

The Natwest DiP was a DiP, I have banked with them for over 20 years and they had all the info on file to give a relatively quick decision e.g. regular pay into my account, statements. They did a credit search and gave the 186K DiP within the hour.
L&C didn't do a credit check so I have no idea how they got it so close to NatWest's but as someone above said, it could be because I have a clean report/no surprises to throw a regular calculator off whack. For mortgage DiP with specialist lenders allowing govt schemes, I also underwent another credit check and got a DiP, which was wildly different from the "regular" mortgage one from Natwest (and L&C's). 

Separately i.e. not a DiP and not what I was talking about above - the Homes England affordability calculator demonstrated to me whether I would pass eligibility based on what I should borrow, rather than how much I could borrow. 

Just for the record, I have also had imaginary lipstick on, nails and eyes imaginary done and I have imaginary glitter in my hair  and "I look beautiful"... I cant wait to get back to the office! (after I wash the imaginary make up off). 

This is adorable!

Until I washed it off lol.
I have only just realised how many times I said imaginary. I over did it didnt I? You now all think I wear make up.