Agreement in Principle Differs between Bank and Mortgage Brokers?

RJM90

I’m wondering if someone could help me with a query.

Basically I’ve used two free mortgage brokers via Habito and Strike Estate Agents to find out how much I could potentially borrow to buy a property. When I give them all my details, they say the max loan they can find is around £158,000. However, when I go directly to Santander or Barclays, my agreement in principle comes out at £171,000. This is the amount we would need to purchase the property we are after but I’m nervous that I may be declined later down the line because of what the mortgage brokers are coming up with.

I’m providing the same truthful information direct to the banks as I am the mortgage brokers and I know the amount we’re looking for is well within our budget (we’re currently overpaying an extra £300 every month compared to what our mortgage would be).

Does anyone know what the reason for this should be? Should I be concerned going ahead with Barclays or Santander? I’d hate to get my hopes up proceeding with a property to be rejected later down the line.

For the record, my credit score is in the top 2% and completely clean.

does anyone think they could shed some light as to why the amounts are lower with the mortgage brokers?

thanks in advance,

K_S

@rjm90 The most common reason is variable pay entered differently. As in, you assume the lender will take your bonus at 100% but as per criteria/policy they only take 50% for affordability.

ACG

The amount you can get is not really linked to your credit score. 

You say you are entering the information truthfully but are you entering the information as the lender would expect? 
A good example for this is self employed, some lenders ask what you annual income is, you may be putting in the figure for your latest years income but actually the lender may expect you to be averaging out the last 2 years figures. Another example can be some benefits, lenders may not accept certain benefits or only accept a percentage of them or even have criteria around them that you do not fit. 

[Deleted User]

Another reason may be thay certain volume based brokerages just take your income and multiply it by 4.5 and say you can get that.  They rarely go to a lender until you've found a property.

Without seeing numbers its possible the broker is incorrect but equally possible they are right

RJM90

ACG said:

The amount you can get is not really linked to your credit score. 

You say you are entering the information truthfully but are you entering the information as the lender would expect? 
A good example for this is self employed, some lenders ask what you annual income is, you may be putting in the figure for your latest years income but actually the lender may expect you to be averaging out the last 2 years figures. Another example can be some benefits, lenders may not accept certain benefits or only accept a percentage of them or even have criteria around them that you do not fit. 

Thanks for this.

I'm full-time employed and have been in the same role for seven years. We currently have a mortgage with HSBC and they originally gave the highest AIP at £172,000, however, when I rang to query the exact question as above, they knocked it down to £161,000 as they said they wouldn't take into account child benefits as they wouldn't run for the full term of the mortgage. However, I've been told both Santander and Barclays do accept child benefits. 

The only loan we have my student finance - nothing else. I do have four dependents so I wonder if that could be affecting the mortgage brokers results (three children and my wife - who is stay at home Mum until the youngest is able to go to nursery in just less than two years).

I've tried to do another mortgage in principle with Truffle but have to wait 48 hours to see what they come back with.


Thanks for all your help.

RJM90

Deleted_User said:

Another reason may be thay certain volume based brokerages just take your income and multiply it by 4.5 and say you can get that.  They rarely go to a lender until you've found a property.

Without seeing numbers its possible the broker is incorrect but equally possible they are right

Thank you.

lonibra

OP, did you ask Habito, Strike, Trussle and any other MBs you have used about why there's a difference?

All the MBs I've used are usually happy to explain these sort of matters. There's usually a very simple reason.

RJM90

lonibra said:

OP, did you ask Habito, Strike, Trussle and any other MBs you have used about why there's a difference?

All the MBs I've used are usually happy to explain these sort of matters. There's usually a very simple reason.

I did with Stroke and they didn’t really understand. I’ll get in touch with some again and see what they say. Still waiting on Trussle response! Thank you!

lonibra

When you do, attach a copy of the bank affordability calculator that you did showing 171,000 borrowing. They can tell you where the confusion may be.

ukri

How old are your four kids. The older they are, the less likely it is that CB will be counted.

kingstreet

Is this a sole application with your wife as a dependent, or a joint application with three child dependents? This would make a difference. If the former, what is the source of the deposit?