mortgage query

[Hellsbells]

Is it normal these days to have to find a house you want to buy and put an offer in before you get a mortgage agreed?

Just had a confusing meeting at the bank which we assumed was to talk us through our mortgage application & get all paperwork sent off so that we could get an 'agreed mortgage in principle'.
Turns out to all have been a waste of time - the mortgage advisor said this doesn't happen anymore and that the applications now all happen AFTER the house has been found. Is this right/normal?
Seems odd to me, because what if we put an offer in and then our mortgage application is turned down

 

[baldrick]

Sounds a bit weird to me.

My knowledge is all from a couple of years ago but the estate agents we saw wouldn't put offers forward unless we had an agreement in principle, I supposed because it means you're serious about buying.

But I don't know how you're supposed to look for a house unless you know how much they will lend.

Your're not in England though are you, maybe it's different there.

 

[shakespearegirl]

As recently as last year in London estate agents were asking to see proof of a mortgage offer before taking an offers to vendors.

 

[equationgirl]

It's usual to get an agreement in principle, which says the bank is willing to lend up to x amount to you. The full mortgage is done after you have found a property.

 

[Puddy_Tat]

It's usual to get an agreement in principle, which says the bank is willing to lend up to x amount to you. The full mortgage is done after you have found a property.

that seems to be the case with nationwide

seems a waste of everyone's time if people didn't know what they stood a chance of borrowing until they had made an offer and had it accepted...

 

[UnderOpenSky]

Totally. Seeing as it can all take a while anyway, it seems a massive waste of the sellers time. Mind you the whole system seems bonkers and stupidly time consuming.

 

[Hellsbells]

Thanks for your responses. I totally agree. It's so hard to find anything out here in the Isle of Man. It was Barclays who told us they don't do mortgages in principle and looked at us like we were mental when we asked. I have no idea if this is the same for all banks over here. Guess we're going to have to contact all of them to find out Barclays also said the whole process is really fast and we should be sorted with a new house in 6-8 weeks!! I mean this sounds great, but isn't the experience of a single Isle of Man person I've spoken to who all say the process is way more complicated & time consuming than the UK. When we told Barclay's woman we were about to move into a new rented property, she looked at us like we were mental again and said we're throwing away our money when we could be owning our own house in 6 weeks. I'm so suspicious of it all - we haven't even had it confirmed we'd be able to get a mortgage, no one's done any credit checks on us, nothing. Plus the choice of houses in our budget at the moment is rubbish. I've looked online & in estate agent windows and not really seen anything I'd be happy to pay for.

 

[Teaboy]

Have you considered a mortgage broker? I don't know how things work on the Island but we used one for our flat a few years ago. The broker did the whole 'agreement in principle' and we didn't have to contact every single provider. Yeah there was a charge involved but it wasn't massive and given all the other expenses anyway it was just good to have that all dealt with.

Again, I don't know if its different over there but there is an extraordinary amount of lenders out there and we ended up with a building society I'd barely heard of.

 

[Plumdaff]

We got an agreement in principle with the Halifax as they do a very soft credit search then sorted our mortgage with a broker after our offer was accepted. I think that's pretty standard.

 

[Hellsbells]

Have you considered a mortgage broker? I don't know how things work on the Island but we used one for our flat a few years ago. The broker did the whole 'agreement in principle' and we didn't have to contact every single provider. Yeah there was a charge involved but it wasn't massive and given all the other expenses anyway it was just good to have that all dealt with.

Again, I don't know if its different over there but there is an extraordinary amount of lenders out there and we ended up with a building society I'd barely heard of.

We did initially see a broker but he was pretty useless. He told us we'd have little hope getting a mortgage as my partner has a 3 year fixed contract. He said he'd contacted all the local banks and only Barclays would be willing to consider us. And that's how we ended up with Barclays They weren't remotely interested in our employment contracts, only pay slips, and said that most other banks would be the same and that they had no idea what this broker was on about.
I've just ended up totally confused by it all...

 

[Teaboy]

We did initially see a broker but he was pretty useless. He told us we'd have little hope getting a mortgage as my partner has a 3 year fixed contract. He said he'd contacted all the local banks and only Barclays would be willing to consider us. And that's how we ended up with Barclays They weren't remotely interested in our employment contracts, only pay slips, and said that most other banks would be the same and that they had no idea what this broker was on about.
I've just ended up totally confused by it all...

Well he sounds suitably useless. The less standard applications (like yours) are supposed to be where they excel. Oh well, either he was rubbish or its a lot different over there. Well, actually, having been there a couple of times I know its a lot different I meant in a mortgage way.

 

[Hellsbells]

Well he sounds suitably useless. The less standard applications (like yours) are supposed to be where they excel. Oh well, either he was rubbish or its a lot different over there. Well, actually, having been there a couple of times I know its a lot different I meant in a mortgage way.

We'll probably try another broker. It's all so frustrating and time consuming though and we haven't even got started on anything yet. There are lots of pluses to living on this island, but omg the place does my head in sometimes.

 

[UnderOpenSky]

We'll probably try another broker. It's all so frustrating and time consuming though and we haven't even got started on anything yet. There are lots of pluses to living on this island, but omg the place does my head in sometimes.

Try another broker. I used London and Country and recommended them to my sister. She got a mortgage on moving back to the UK before even starting her new job.

 

[Bahnhof Strasse]

We'll probably try another broker. It's all so frustrating and time consuming though and we haven't even got started on anything yet. There are lots of pluses to living on this island, but omg the place does my head in sometimes.

Pretty sure have mentioned this before; don't use a broker for a first mortgage on a property, go straight to Barclays, HSBC or whoever, you cut out the middle-man which saves a lot of time and agg.

If re-mortgaging an existing property a mortgage broker can be useful in finding the best deal.

 

[Idaho]

Nationwide are often the cheapest. The mortgage comparison sites are useful. Check out the total cost of the loan and be suspicious of any cash back or other inducements that will cost you in the long run.

 

[UnderOpenSky]

Pretty sure have mentioned this before; don't use a broker for a first mortgage on a property, go straight to Barclays, HSBC or whoever, you cut out the middle-man which saves a lot of time and agg.

If re-mortgaging an existing property a mortgage broker can be useful in finding the best deal.

Maybe. It depends how easy it is for you to get one. They were invaluable for me as they told me who I was most likely to be accepted by after being knocked back by Nationwide who I bank with.

 

[Bahnhof Strasse]

Maybe. It depends how easy it is for you to get one. They were invaluable for me as they told me who I was most likely to be accepted by after being knocked back by Nationwide who I bank with.

The first mortgage we applied for with a mortgage broker which was supposedly confirmed was ultimately rejected by the lender on our current and previous houses and going direct to the bank quickly saved us from losing the houses. So I may be jaded.

 

[smmudge]

We used a broker for our first mortgage and he was great, but we couldn't go to a high street bank as my wife has a bit of adverse.

Estate agents will know brokers (and try to push them when you contact them), that's how we found ours. Though I'm sure with many things they will be hit and miss, you will probably get a good idea whether they know what they are talking about or not. If you speak to a few estate agents you may even find a few which recommend the same broker.

 

[Hellsbells]

Ok, so we saw a house online that we liked the look of. It only went on the market on Tuesday. I called the estate agent on Wednesday to arrange a viewing. They told me it had already been sold - in the space of a day I realise this may be normal for London but it certainly isn't for here.

Anyway, my point is how will we ever stand a chance of getting a decent house if the stupid bank refuses to give us any kind of mortgage in principle in advance?! By the time we'd have arranged a meeting with Barclays & got all the mortgage paperwork sorted and checks done (god knows how long this would all take), any decent house would have been whipped up by someone else, presumably not a first time buyer.
This is all so ridiculous and frustrating.

 

[ruffneck23]

how are you finding it on the Island ? and where are you looking to move to ?

 

[Hellsbells]

how are you finding it on the Island ? and where are you looking to move to ?

It's felt like quite an adjustment coming from London, but getting used to it I love the space and how close we always are to somewhere stunningly beautiful and isolated. We've learnt to make the absolute most of any sunny days. We've also learnt the essential need to plan regular holidays and weekends away to the UK. Can feel a bit cut off and claustrophic here sometimes tbh.

We're just on the outskirts of Douglas now & looking to buy somewhere nearby. We lived right in the centre when we first moved here which we didn't like all that much. Some of Douglas is a bit erm...neglected to say the least!

Are you back in the UK now?

 

[ruffneck23]

yeah I moved back in march , I was living down south in port st mary and working in Castletown , its lovely down that way , and yes some of Douglas is a bit run down.

I have been back a few time and think I will continue to do so, I work near Gatwick now so can just get a flight after work on a Friday. I'l let you know when I'm next over

 

[equationgirl]

Pretty sure have mentioned this before; don't use a broker for a first mortgage on a property, go straight to Barclays, HSBC or whoever, you cut out the middle-man which saves a lot of time and agg.

If re-mortgaging an existing property a mortgage broker can be useful in finding the best deal.

I disagree. I found a mortgage broker was incredibly helpful and got me a mortgage that I couldn't get if I walked in off the street.

 

[Teaboy]

I disagree. I found a mortgage broker was incredibly helpful and got me a mortgage that I couldn't get if I walked in off the street.

That was my experience as well. The broker found an excellent deal and was also a lot of help in navigating the mortgage qualification process, basically he did everything.

 

[Hellsbells]

Ok so am back on the house hunting again. We managed to find an online mortgage agreement in principle thing for Barclays and now have an email confirming how much (in theory) they'd be willing to lend us. I've printed it out. It looks crap & like anyone could have forged it - is that all a mortgage agreement is these days? I always thought it would be some kind of official document or certificate or something.

 

[ffsear]

Pretty much yes. It just shows you can prove to the owner / estate agent that someone can back up your offer (in principle)

 

[Hellsbells]

Pretty much yes. It just shows you can prove to the owner / estate agent that someone can back up your offer (in principle)

Ok good, as long as what we've got is normal. It just looks so rubbish, guess I was expecting more. And it doesn't really prove anything. We could have entered any old random salary amounts etc into the online form - how would they know if we were lying

 

[ffsear]

Ok good, as long as what we've got is normal. It just looks so rubbish, guess I was expecting more. And it doesn't really prove anything. We could have entered any old random salary amounts etc into the online form - how would they know if we were lying

That would come out when they push through with the full mortgage application as they ask for payslips, p60's and bank statements. So anyone who lies would be wasting their own time really.

 

[Hellsbells]

Just need to find a house to buy now There's literally nothing atm

 

[Teaboy]

I'm not sure how important the mortgage in principle actually is. I mean from a perspective of actually having a piece of paper, obviously you need to have an idea in your head that you can get a loan and up to how much but I wonder if you actually have to be able to prove it. Its only in principle and loads of purchases fall through because people can't get mortgages or have to change provider, its just the process. I can't recall ever being asked for it although I guess they may have contacted our broker independently.

As long as you've done your due diligence in getting a good idea of how much you can borrow and whether you believe the repayments are affordable then just get out there and start putting some bids in. Loads of people put bids in without even doing these basic things.