Mortgage DIP's AIP's

mcplumb

When looking at your ability to borrow/affordability how guaranteed can your DIP be ?

We have had a offer accepted and now just waiting for our vendor to get an offer accepted. I'm now just possibly overthinking the mortgage.

My main concern is I'm self employed (with 20 Plus years history), but all I hear is "SE ,oh that could be more difficult"

Obviously I'm not going to formally engage a broker until we have a chain formed, but also can't understand why there isn't a better "pre purchase" than DIP's etc. Also I find it odd that so many things rely on that particular property, yes I understand property value v's lending etc. But there must be a better indicator rather than the crude DIP. Sales seem to fall through once the numbers are crunched, there must be a better way ????





  

ACG

You can consult a broker at any point. Waiting until the chain is formed is not "late" but its well into the process.  
You have made an offer, the offer has been accepted. If you plan on using a broker (im not here to say you should or should not), then now is as good a time as any to speak to one. They can check over everything including the number crunching before the chain does form. 

A DIP is generally accurate, but it is only as accurate as the information you enter. The biggest places DIPs go wrong is usually when it involves maintenance, overtime/bonuses/commission and benefits. 

As a general rule we only get 1 or 2 declined applications a year, which means we are only getting 1 or 2 DIPs that subsequantly get declined. There are various reasons for those declines, our mistake (I would love to say we are perfect but we are only human), the customers mistake, the customer withholding information, underwriters discretion or the valuation falling down.

mcplumb

Ok, thanks.

I have an online DIP from L&C and have had a chat with a broker linked to the agent. My main concern was the sigh from the broker regarding SE. There seems so much negativity over self employment, despite 20 years trading with consistent figures year on year.

I would add my 23/24 return does show a drop in taxable income, this was due to an outright vehicle purchase. This does worry me as the broker said they wouldn't average the last 3 years if there was a dop. They would only use that year, so large drop despite the trading figures being around the same as the previous year.

Our basic details are;

Property offer @ £385k, with 20% deposit

Dual application, married with no dependants  

Myself SE age 49 in Feb, last three years - £63k, 65k and 46k

Wife age 45 in March - Employed salary £35k with guaranteed NHS pension of 7k annually


Maybe I just got the wrong feel for the broker!

 

ACG

Your buying a house, if you dont like the broker find another. You have thousands to choose from. If things go wrong, you want someone you like and trust at the end of the phone, not someone you think will be rolling their eyes. 

Some lenders will add back in the vehicle purchase, but not all. In any event, £46k plus £35k plus £7k incomes, should probably get you there. But I suppose it does help if you are adding back in the cost of the vehicle. 

I suspect the broker is used to seeing nice easy cases, so anything which requires a bit of effort he/she probably doesnt have the inclination to do it. Like every walk of life, some people are good at their job, some are not. 

L&C I dont know, I read mixed things on here about them, some love them some really do not. As a general rule of thumb, the experienced brokers work for smaller firms. People start off in banks and building societies and then in time move away from those places where they can earn more money, lose the targets and probably enjoy the job a little more. 

trashpanda__

A DIP isn't guaranteed either, it is saying from the info the broker has submitted, if all correct, they should be able to lend you X amount - but they will want to look in to your financials in closer detail before approving.

I definitely agree that you should look for another broker. Being self employed doesn't make it difficult to get a mortgage, different lenders have different criteria. A good broker knows which lender to best place you with for your circumstances. L&C I used for my first mortgage because I wanted to keep my costs as low but got a bad deal (not saying at all that would happen to you), but on reflection I should have got proper advice.
I ended up used Clark Mortgages in Chester (remote company) but close to my home, also self employed and overall really happy as I had a few things I was worrying about but they sorted it.

Help that helps.