Multiple AIPs , Hard searches and Credit Score

englishmuffin

Is it okay to go to a couple of mortgage advisors that both run 'hard searches' with lenders to get me AIPs and then to choose from one of them? Will that affect my credit score? Is two separate searches okay, can I go to a third one? How many hard searches are too many? Should I be asking any potential mortgage advisors to only do 'soft' searches? They told me this is okay they can do that but it will not necessarily bring the best deal. 
This is all new to me, please help!

Cscott139

Hi, almost all lenders will do a soft search at AIP stage and then perform a hard footprint at application stage so you probably don't need to worry. Have they told you which lenders they are looking at?

K_S

englishmuffin said:

Is it okay to go to a couple of mortgage advisors that both run 'hard searches' with lenders to get me AIPs and then to choose from one of them? Will that affect my credit score? Is two separate searches okay, can I go to a third one? How many hard searches are too many? Should I be asking any potential mortgage advisors to only do 'soft' searches? They told me this is okay they can do that but it will not necessarily bring the best deal. 
This is all new to me, please help!

@englishmuffin There is rarely a reason for brokers to do multiple AIP/DIPs.

And if your case is such that you need to do a couple of DIPs to see whether you will be accepted or not, you might want to avoid accumulating hard-checks which may tip you over the edge on a further DIP or application by impacting your lender's "credit-scoring" (not to be confused with the Experian/Clearscore/CreditKarma credit score).

Again there is no good reason to go to multiple brokers. Use one whole of market broker and if you don't trust their recommendation for whatever reason or they can't get you what you want, then consider another one.

If you stick to a soft-search only policy, you miss out on lenders who have a hard-footprint for broker DIPs like Barclays, Virgin, Coventry, etc. so you may miss out on the "best deal" but you can always check what the actual cost difference is and make a decision accordingly.

amnblog

There is a lot of misunderstanding in the market around decisions in principle and approaching lenders.

As stated by K_S above, you should certainly not be dealing with more than one broker in a time. The correct way for a broker to handle a situation such as this would be as follows:

• Establish your situation and requirements
• Establish suitable lenders for you, and from there the best available product and lender combination
• Get your agreement to the lender and product combination and permission to run a decision in principle
• Run and obtain that decision in principle
• Progress to full application

In the unlikely event you did not pass decision in principle, the broker would establish why, advise you, and re-plan accordingly.

This process is very distinct from the process that we frequently see used by borrowers applying direct to Lender, which is:

• Decide the type of rate you want
• Look for the lowest rate on the market
• Check that the lender offers soft footprint on decision in principle (which may affect the decision-making)
• Apply for a decision in principle
• If decision in principle agreed, find out at application stage if everything fits with the lender

In the event you do not pass decision in principle, back to stage one, and try another Lender.

A few of key points to note:

For a case done properly, without surprises, the only value in a decision in principle is it keeps estate agents happy and sometimes puts client's minds at rest. As a broker, fit's part of the process, and 90% of the time it happens without any hitches. For the bulk of the other 10% of the cases, a simple tweak sorts it out.

To obtain a full mortgage offer you will need a full credit search registered on your file at some stage, avoiding that at the early stages has little value in a case done correctly.

Borrowers running multiple credit searches with multiple lenders, or with multiple brokers, do themselves no favours and possible harm.