Like A Rolling Stone

So much has happened in the past month that I didn’t really know where to begin! I was going to break it all down into smaller posts but that has just led me to procrastinate typing it all up so I’m going to just write it all in this post!

A couple of weeks after our first foray into viewings, we were back at it.  This time we went by ourselves and had a look at a small village about ten minutes drive away from the first town we had a look at.  We quite liked the quieter feel while still being close to town.

We viewed four properties that day.  There was one definite ‘no’ due to a lack of natural light and a small garden and two definite maybe’s for various reasons. The last one of the afternoon I didn’t even recall booking the viewing for.  We loved it.  It needs some work but not nearly as much as the other place we looked at did.  It had three bedrooms, a garage and a huge garden.

After the viewing, we went to the local pub to discuss what we had seen.  We started chatting to the bartender and she told us more about the area (and the other local pubs!).  Talking about what we wanted from our forever home really cemented our decision and we put in a lower offer on the final place we saw.

A few days later we found out we had been successful and our offer had been accepted! We were both in a bit of shock, we fully expected the offer to rejected as it was last time.  Over the next week there were a flurry of emails from the real estate recommending mortgage brokers and solicitors to us going to comparison websites and doing our own research.  We ended up going with the real estate agents recommended broker and finding our own solicitor via the comparison website and this seems to have worked out well.

We had a homebuyer’s report done on the place to make sure there was nothing serious wrong with it (again, we used a comparison site to get the best deal).  Thankfully there wasn’t.

So as it stands, our solicitor is making the final checks on the property and we are still awaiting the outcome of our mortgage application.

We are still in two minds about potentially leaving London.  I’ve gone over the pros and cons in my mind more than a few times and there are advantages to both options but  ultimately I believe we can make a good go of living in this new area.

I look forward to letting you knowing whether we are going to be homeowners or not in the next post!

What is an Agreement in Principle (AIP) and why do I need one when buying a property?

The more I learn about the home buying process, the more I think it’s all about the acronyms.  In most of the research I’ve done, the first step of the home buying process, before you even begin to view properties, is proving that your lender MIGHT lend you the money to buy a house.  This is called an Agreement in Principle (AIP), but also can be called a Decision in Principle (DIP), Mortgage Promise or Lending Certificate.

What is an Agreement in Principal?

An Agreement in Principal (I will refer to them as AIP for the rest of this post) is a certificate or statement from a lender to say that ‘in principle’ they would lend a certain amount to a particular prospective borrower or borrowers based on some basic information. Most providers will require you to complete a form detailing your income and expenditure and the amount you think you would like to borrow.  They may also conduct a credit check.

Although an AIP doesn’t give any guarantees over what size of mortgage you may be offered once you formally apply, it will give estate agents some peace of mind that you can potentially afford the properties that you are viewing.

That all sounds good, where do I sign up?

Hang on just a minute! Many banks boast that you can get an AIP from them in just a few clicks however if they do a ‘hard’ credit check, it will leave a footprint on your credit file, regardless of whether you go on to borrow from them. Too many credit checks on your file can make it hard for to arrange a loan, and the fact that a lender has checked your file stays on record for six years.  Some lenders will leave a soft footprint but they are few in number and may not be the right one for you.

Why should I get an AIP?

Theoretically you could skip the AIP and speak directly with a mortgage broker as they aren’t compulsory but there are a few benefits to getting one.

  • If you have a poor credit history and aren’t sure if you would be accepted for a mortgage, the AIP can give you reassurance about your borrowing prospects.
  • It can give you more credibility with estate agents as it shows that you can move ahead in the process if the offer you make on a property is accepted.

 

We are looking at mortgage brokers now with the view of starting to look at properties from next month and will probably have a chat with the broker before applying for an AIP.

I’d love to hear your experiences with AIP’s.  Did you find it useful in your house hunt? Were you able to get a mortgage without one?