Mortgage Matters - Why an Estate Agents wants to know if you have a Mortgage in Principle (MIP)?
A question that often comes my our from potential buyers is why an estate agent is asking if they have a Mortgage in Principle (MIP), when it comes to making an offer? - Here, mortgage broker, Mark Stannard from Stannard McMahon Ltd tells us why.
A question that often comes my way from potential buyers is why an estate agent is asking if they have a Mortgage in Principle (MIP), when it comes to making an offer ?
The short answer is that having this gives the agent (and, subsequently, the vendor) some assurance that you're a good bet and things won't fall apart later. In fact, some agents might also see it as an opportunity for their own 'in-house' mortgage adviser to make a sale, but that's a discussion for another time!
Also sometimes called an Agreement or Decision in Principle, an MIP is basically a formal indication of how much a lender will offer you, but importantly it also factors in a credit check - which is the real 'acid test'. Higher Loan to Value borrowing is a greater risk to a lender, which is why they charge a higher rate and may also require a stronger credit score.
As far as granting that Mortgage in Principle, many things can affect a lender's decision - too little or too much credit, the odd missed payment or something more serious. This is why it's good for everyone to know early in the process how realistic the sale is. Even if you've managed to agree a price without an MIP, it's the first stage of a full mortgage application anyway.
How we can help
It's essential you get good early advice and the choice of lender can't be underestimated, and there can be very different outcomes from seemingly similar lenders. We have a comprehensive range so are able to find the best solution for you. A short consultation with us is the equivalent of visiting all the High Street lenders in one go… as well as some you don't see on the High Street too. Whether you are a mover, first-time buyer, Buy to Let investor, or are perhaps remortgaging to find a new fixed rate, let us do the work – free and with no obligation – for you.
If you like some advice on mortgages or if you are looking for a mortgage for your next property purchase please let us know HERE and one of the team from Stannard McMahon will be in touch.
If you found this article of interest you might also want to read our guide to Home Buyer Reports HERE