Mortgage in Principle, how reliable?

Rjhsteel

Going through L&C and after applying online, we have had a mortgage agreed in principle for the amount required for a move to a new home.

But after briefing checking a view main banking sites like Barclays and Natwest, the amount it suggested we could borrow, was a lot lower than the agreed amount with L&C.

Which has made be a bit worried.

How reliable is a mortgage amount agreed in principle?

Thanks

K_S

@rjhsteel If it's an L&C MIP you're talking about, it's just a basic calculation tending towards the optimistic side (as they need to draw people back to them and can't be too much off the MIPs issued by their competitor volume brokers). It is also highly reliant on you having put in the right figures.

I'm not trying to say that it is unachievable but it may only be with a few lenders who may not lend for your circumstances/requirements.

A lender AIP is more reliable, but only if the information put in is accurate. For example if you put in an annual bonus amount of 10k in the DIP form it may use that for affordability. However, it might well be that the specific lender requires a 2 year track record for bonuses which you don't have. I hope that makes sense.  

Rjhsteel

Yes that's the problem really, i need a cast iron guarantee i can have that mortgage before proceeding, otherwise i can't get the property i'm after tbh. 

I got sent a link saying once i received an offer for my house then i could proceed with a full application, but i need to know before i put my house on the market, otherwise its pointless, and i would be wasting other peoples time.  

nyermen

Rjhsteel said:

i need a cast iron guarantee i can have that mortgage before proceeding

Nothing is cast-iron until the bank releases the funds, the formal offer is as good as it gets, but there have been cases (albeit few) where a bank has reversed their decision even after full offer.

A "decision in principle" (/ AIP / etc) I think is soft-search only?  If so, getting another from a different provider should be possible without impact.  May depend on the institution.
K_S can probably confirm better than me.

K_S

@rjhsteel The best you could do is actually speak to a broker and say that you want a lender AIP before you start viewings. They will then review your circumstances and requirements properly, and then run a lender AIP. If that is accepted, then that is as much assurance as you are going to get. Plenty of brokers listed on the MSE recommendations here https://www.moneysavingexpert.com/mortgages/best-mortgages-cashback/#step3

Just to be clear, no one in this process (lender or broker) is going to be able to give you a cast-iron guarantee, at least not in a written form or in good faith.

Rjhsteel

Thank you both.

Once L&C open up again I will speak to them and try and get a AIP sorted out.