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If you’re looking for specialist mortgage advice in Cambridge, it’s not uncommon to come across tenants who express their desire to purchase the property they currently rent from their landlord.
Selling a property to a tenant offers several advantages for landlords and can be an attractive option to consider before exploring the open market.
In this article, we will delve into the reasons why landlords may choose to sell to tenants and explore the benefits it offers for both parties involved.
The implementation of tax relief regulations brought about significant changes that motivated landlords to consider selling their properties. These regulatory changes increased the tax burdens for many landlords compared to previous years.
Consequently, some landlords made the decision to exit the housing market and explore alternative investment opportunities in different sectors.
Landlords who are dedicated and deeply committed to their role, and who believe in the enduring value of their properties, were more inclined to navigate the impact of these legislative changes. They view property as a sustainable, long-term investment.
On the other hand, more casual or novice landlords may have entered the market with a short-term profit-oriented mindset. If circumstances did not align with their expectations, they were more likely to opt for selling their properties.
Selling a property to a sitting tenant offers landlords several advantages. Firstly, it can lead to significant cost savings. By selling directly to their tenant, landlords can bypass the need to involve estate agents and avoid paying their commissions.
This reduces the overall expenses associated with the sales process, potentially increasing the landlord’s profits. Secondly, opting for this approach ensures a steady rental income. Throughout the transition period until the purchase is finalised, the tenant continues to make rent payments.
This provides landlords with a consistent income stream, which can be especially beneficial for those who rely on rental income to cover mortgage payments or other financial obligations.
Another benefit is the potential reduction in refurbishment costs. Since the tenant is already residing in the property, the need for extensive refurbishment before selling is often minimised or eliminated. As a result, landlords can save on refurbishment expenses, as the property is already in a liveable condition.
Overall, selling a property to a tenant allows landlords to enjoy cost savings, a steady rental income, and reduced refurbishment costs. It provides a mutually beneficial arrangement for both parties involved, streamlining the sales process and ensuring a smooth transition.
When considering the advantages of buying the property you currently rent from your landlord, there are several key benefits to consider. Firstly, as a sitting tenant, you have the advantage of being intimately familiar with the property.
Having lived in it, you have first-hand knowledge of its ins and outs, strengths, weaknesses, and overall suitability. This deep understanding allows you to make an informed decision about whether the property meets your specific needs and preferences.
Secondly, unlike other buyers, you don’t have to go through the process of finding alternative accommodation. Since you already reside in the property, you can avoid the delays and uncertainties associated with moving house.
This streamlined process allows you to proceed with the purchase smoothly and efficiently, without the need for relocation.
Furthermore, buying from the landlord may present an opportunity for a discounted price. As landlords can avoid certain costs associated with selling through traditional channels, they may be more willing to offer the property at a lower price to the sitting tenant.
This can provide a valuable chance to secure a home at a more affordable rate compared to properties on the open market.
Additionally, if the agreed-upon purchase price is below the market value of the property, there is potential for deposit assistance. Lenders may consider utilising the property’s equity to contribute towards your deposit, easing the financial burden.
In some cases, there may even be an option to proceed with the purchase without providing a deposit at all, further facilitating the homeownership process.
When contemplating the purchase of a property as a sitting tenant in Cambridge, it is crucial to approach the process with thoughtful consideration and seek the guidance of a professional specialist mortgage advisor in Cambridge.
Engaging in conversations with a mortgage advisor who possesses comprehensive knowledge of the local market can greatly help you in navigating the complexities of the transaction and making well-informed decisions.
A qualified mortgage advisor in Cambridge will carefully assess your individual circumstances, financial position, and aspirations, providing guidance on suitable mortgage options available within the city.
Throughout the process, they will provide valuable insights and expert advice, ensuring a seamless and efficient home buying experience.
It is essential to recognise that seeking professional mortgage advice in Cambridge is essential to maximise the benefits of this opportunity as a sitting tenant considering the purchase of the property you currently rent.
By doing so, you can potentially benefit from cost savings, leveraging your familiarity with the property, and securing favourable mortgage arrangements. This path offers a smooth transition from tenant to homeowner.
Therefore, by carefully evaluating your options and seeking professional mortgage advice in Cambridge, you can wholeheartedly embrace this unique opportunity and embark on a fulfilling journey toward homeownership.
To obtain an agreement in principle, a reliable mortgage broker in Cambridge like us can assist you by acting on your behalf and communicating with the mortgage lender. You can schedule a free mortgage appointment with one of our experienced mortgage advisors in Cambridge either through our Get Started online form or by giving us a call.
During this appointment, your mortgage advisor in Cambridge will request proof of your income, employment, credit history, and other relevant personal information that will be helpful in assessing your eligibility for a mortgage.
Once you’ve provided this information, we can usually obtain your agreement in principle within 24 hours. This will give you an approximate idea of how much you may be able to borrow, providing you with confidence as you navigate the property market.
Obtaining a mortgage agreement in principle can be a smart move before starting your property search, as it gives you a general idea of your borrowing capacity. This helps you avoid wasting time on properties that are beyond your financial means. As a first time buyer in Cambridge, this can save you a lot of time!
Additionally, having an agreement in principle can give you an advantage when making an offer on a property, as sellers and estate agents may view you as a serious buyer. However, it is important to note that an agreement in principle is not a guarantee of a mortgage, but rather a useful tool in the home-buying process.
We recommend arranging your mortgage agreement in principle before searching for a new property. This pre-agreement provides you with a general estimate of the amount you can borrow, enabling you to avoid wasting time on properties that surpass your financial capacity.
Furthermore, holding an agreement in principle can enhance your position when making an offer on a property. Sellers and estate agents are more likely to perceive you as a committed buyer, granting you an advantage over those who lack an agreement in principle. When moving home in Cambridge, if another buyer has an AIP and you don’t, they may have the upper hand against you.
It is important to recognise that an agreement in principle does not guarantee a mortgage but serves as a valuable aid in the home-buying journey.
When applying for an agreement in principle, your mortgage advisor in Cambridge will collect personal information such as your full name, date of birth, current address, length of time at your current address, employment status, length of time in your current job, income details, regular outgoings, credit history, and more.
This information is used by the mortgage lender to assess how much they are willing to lend to you. The lender may also require additional information, such as bank statements or proof of income, before making a final decision.
An agreement in principle is different from a mortgage offer. An agreement in principle provides an initial indication of the amount a mortgage lender is willing to lend based on the information you have provided. It is not legally binding and does not guarantee a mortgage offer.
A mortgage offer, on the other hand, is a formal agreement from a mortgage lender confirming that they will lend you the necessary funds after conducting a thorough assessment. It is one of the final stages of the mortgage process and sets out the terms and conditions of the mortgage.
Typically, obtaining an agreement in principle for a mortgage will not significantly impact your credit score, as most mortgage lenders perform a soft credit check that is not visible on your credit report. However, some lenders may perform a hard credit check during the agreement in principle process, which could affect your credit score, especially if you’ve applied for multiple agreements in principle within a short time.
It is important to limit the number of mortgage applications you make and only apply for an agreement in principle when you are genuinely considering purchasing a property.
Having an agreement in principle provides several benefits. It gives you a clear understanding of how much you can borrow, helping you search for properties within your budget and saving you time.
It can also give you a competitive edge when making an offer, as sellers may prefer buyers who already have an agreement in principle.
Additionally, it can expedite the mortgage application process once you find a property to purchase. However, it’s important to limit your applications and only apply for an agreement in principle when you are genuinely interested in buying a property.
Before making any property offers, we recommend speaking with a mortgage broker in Cambridge. By obtaining an agreement in principle beforehand, you can determine how much you can borrow and narrow your property search within your budget.
As a mortgage broker in Cambridge, we can provide an agreement in principle within 24 hours of your initial mortgage appointment. Book your free mortgage appointment today and let us assist you in obtaining your agreement in principle as you embark on your mortgage journey with the support of a trusted mortgage broker in Cambridge.
As a trusted mortgage broker in Cambridge, we specialise in helping customers get a mortgage in Cambridge through the Shared Ownership scheme. Established under the Housing Act 1980, this government initiative aims to assist UK residents in purchasing their dream homes.
The Shared Ownership Scheme allows you to acquire a portion of a property, sharing ownership with a housing association. Typically, you can purchase between 10% and 75% of the property, while the housing association retains ownership of the remainder. By taking out a mortgage on your share, you pay a reduced rent on the remaining portion, making homeownership more affordable.
To qualify for the Shared Ownership scheme, you must be a permanent UK resident, either a first-time buyer or a home mover in Hull. Additionally, your total household income should be less than £80,000 (£90,000 in London). Most properties available through Shared Ownership are leasehold, meaning they are owned for a specific period.
In recent years, the scheme has become more accessible. The minimum share requirement has been lowered from 25% to 10%, enabling more individuals to take advantage of this opportunity. Moreover, landlords now cover maintenance and repair costs during the first decade of ownership.
To determine your eligibility for the Shared Ownership Scheme, we recommend consulting with our expert mortgage advisors in Cambridge. They will assess your affordability, financial situation, and personal circumstances to guide you in making an informed decision. If Shared Ownership is not the ideal route for you, we will provide alternative options.
Our dedicated team will outline the costs associated with Shared Ownership and help you determine if it aligns with your specific needs and circumstances. Transparency and honesty are central to our service.
As with any mortgage, Shared Ownership has its pros and cons. On the positive side, the deposit amount is based on the percentage of the property you are purchasing. Future opportunities to buy additional shares may also be available, subject to specific conditions. However, paying higher rent on a lower share and seeking permission for structural changes are potential drawbacks.
Selling a Shared Ownership property differs from selling a traditional home. In most cases, you must own 100% of the property to sell it, as the housing association retains partial ownership.
Shared Ownership is an excellent option for first time buyers in Cambridge struggling to save for a deposit and meet conventional mortgage requirements. The lower deposit requirement makes homeownership more accessible. However, the availability of properties eligible for Shared Ownership can sometimes complicate the process. We will ensure you have a comprehensive understanding of Shared Ownership in Cambridge before making a commitment.
To explore the possibilities of a Shared Ownership mortgage, book a free appointment with our mortgage advisors in Cambridge. We offer flexible scheduling, including weekends, to accommodate your needs. Our team is committed to guiding you through the process and helping you achieve your homeownership goals.
For more information on the Shared Ownership Mortgage Scheme, visit the government’s OwnYourHome website.
A 95% mortgage is as simple as the name would suggest; you are borrowing against 95% of the price of a property, and then you are covering the remaining 5% with your deposit. An example of this is if you looked at buying a property that was worth £150,000 with a 95% mortgage, you would be putting down £7,500 as your deposit and borrow the remaining £142,500 from the lender.
Off the back of the March 2021 Budget, Boris Johnson announced a Mortgage Guarantee Scheme for mortgage lenders, making 95% mortgages more readily available from the bigger high street banks.
This is fantastic news for First-Time Buyers and Home Movers alike, as this scheme will continue running until December 2022. Certain terms and conditions will apply though, which is something your Mortgage Advisor in Cambridge will be able to look at, to see if you qualify.
All our customers who opt to get in touch will receive a free, no-obligation mortgage consultation where one of our dedicated mortgage advisors will be able to make a recommendation on the best possible route for you to take.
95% mortgages are usually accessible by both first time buyers in Cambridge & those who are moving home in Cambridge. Whilst saving for a 5% deposit sounds like a pretty straightforward concept, you’ll still need to have an acceptable credit score and prove that you are able to afford your monthly mortgage repayments, in order to access a 95% mortgage.
A good credit score is essential in the process of obtaining any mortgage, especially a 95% mortgage. Things like paying any current credit commitments on time, ensuring your addresses are updated and checking that you’re on the voters roll, can all help with your credit score.
Affordability is another one that is important to take note of. By giving the lender details of your income and monthly outgoings (things like your bank statements will be necessary for this) and any pre-existing credit commitments, your lender will be able to get a general overview of whether or not you are able to afford this type of mortgage.
Nowadays we see lots of family members helping each other get onto the property ladder, especially parents looking to further their children’s lives. The way this usually happens is by gifting the person looking to find their home, the deposit required.
Known through the industry as the “Bank of Mum & Dad, Gifted Deposits are only intended to be a gift, and not as a loan. The lender will need proof that this has been agreed, before it can be used towards your mortgage.
When looking for a 95% mortgage, you want to make sure you have the right type of mortgage. Each mortgage type works differently, with that choice allowing you to find one that is most appropriate for your personal and financial situation.
Some homeowners and home buyers prefer Fixed Rate or Tracker Mortgages, mortgage types which mean you either keep interest rates at a set amount for the term given or have your interest rates tracking the Bank of England base rates.
Alternatively, you might find that Interest-Only or a Repayment Mortgages are more your style. Interest-Only allows cheaper payments until you need to pay a lump sum at the end (mostly now used for Buy-to-Lets), whereas a Repayment mortgage (a normal mortgage if you’d like) means you’ll be paying interest and capital combined per month.
Seeing as a mortgage is such a large financial outgoing, you need to be prepared and need to be aware. You might find things like higher interest rates, remortgaging difficulties due to less equity and then negative equity all cropping up if you’re not.
There is no need to worry though, as all these can be avoided if you’re savvy enough with your process to begin with. The more deposit you put down for a property, the less risk the lender will see you as.
A larger deposit, of say 10-15%, would not only reduce the rates of interest by a noticeable amount, but would also give the property more equity and reduce the risk of negative equity, thanks in part to you borrowing less against the property.
So, whilst the risks may seem intimidating, planning ahead and saving for a bigger deposit to access something like a 90% or even an 85% mortgage will be a massive help in your mortgage journey and something you’ll be able to reap the rewards from in the future.
If you are a first time buyer in Cambridge or are looking at moving home in Cambridge, you will know that several forms of mortgages are available. Some of them are more common than others, and some may even be difficult to find. We have assembled a list of some of the most common forms of mortgages. You will also find one of our MoneymanTV episodes useful for learning more about these.
A fixed-rate mortgage means that for a specified time, the mortgage rates will remain the same. You should decide your period, usually 2, 3, or 5 years or more, for your payments. You know your mortgage balance will typically be the largest outstanding one, regardless of inflation, interest rates, or the economy.
Your interest-rate shall track the base rate of the Bank of England by using a tracker mortgage. In other words, the lender does not fix the rate itself. You pay a sum above the base rate of the Bank of England. An example of this is where the basic rate is 1%, and you are tracking at 1% more than the basic rate, you pay 2%.
If you carry out a repayment mortgage, you pay capital and interest together every month. So long as you carry the full term of the interest loan, you will pay the mortgage debt at the end, and the property shall be yours. This is the risk-free way of paying the lender back the money.
The interest you are paying in the early years, and particularly with a period of 25, 30, or 35 years, your balance would decrease very slowly. In the last 10 years or so, this scenario changes, where your payments pay more capital than interest and your balance falls even faster.
While some transactions allow mortgages on an interest-only basis, residential property is even more difficult to obtain on an interest-only basis. Lenders are also less likely to sell a product that is interest-only. However, it may be an alternative under some conditions.
This involves reducing the amount of money you pay out as you’re older or have other savings. When it comes to offering these items, lenders are very strict now, and the valuation loan is much smaller than before.
You can build a savings account alongside your mortgage account for an offset mortgage. How this works, is you pay interest on the difference, for example, you pay £80,000 for the balance of £100,000, and £20,000 is deposited in your bank account. This can be a very successful way to manage your capital.
The £200 million scheme was introduced in 2014 to offer a boost to anyone from the armed forces who needed help buying a home. Originally intended to end in December 2019, the government made this an enduring policy, as a thank you for their commitment to their service and dedication to the country.
This works by accessing a borrowed deposit that is summed up to half of your annual salary (a maximum of £25,000), without any interest involved, then the deposit can be used to purchase a first home or to move into a new home.
A benefit of the scheme is that you don’t need any current savings to get yourself on the property ladder. The money raised from the loan can partly be used to be put towards your deposit or other costs.
Another advantage that benefits forces personnel is that the majority of lenders will accept the loan towards the deposit for a new home. More relaxed than some other schemes, the Forces Help to Buy loan can be paid back over a period of 10 years, so you don’t have to feel as rushed.
Even if you were unsure that you would have a chance, if you are able to match the criteria (length served, service term left and medical categories), you are eligible to purchase your home using the Armed Forces Help to Buy Scheme.
Navigate through for futher details from the Government site.
From the minute you call up until the completion and beyond, our knowledgeable mortgage advice team in Cambridge has your back. They will make sure you are taken care of and are determined to find you the best option for your circumstances.
For your fast and friendly customer experience, get in touch today and see how we might be able help you with seeking your dream home.
Please note, the Forces Help to Buy is not the same as the standard UK Help to Buy Mortgages in Cambridge.
Whether you are looking at your options as an inexperienced first-time buyer in Cambridge searching the market for your first home or are looking to move home, it’s likely you will have discovered that some of the larger estate agents and builders would prefer it if you used their in-house mortgage advisor and conveyancing services.
As a standalone mortgage broker in Cambridge, we have spent many years working hard to help out our customers. We’ll hear from a large amount of customers who have felt themselves being pressured by an estate agent to opt into that companies personal financial services. Here are just some of the instances we’ve heard from people who get in touch;
A lot of estate agents across the industry have a reputation for refusing to put an offer forward if you pass up on their in-house mortgage advisor and go with an external mortgage broker instead.
As if this act wasn’t bad enough, some have even gone as far as to refuse putting an offer through because another client who actually said yes to their in-house service has also made an offer on the same property.
Something else we hear all too often is the ridiculous quotations they have been known to give for their services. Unfortunately there have been customers we’ve spoken to who weren’t aware these were overpriced and went forward with them. One notable customer was charged £1,500 for a simple purchase with a particular estate agent.
A member of our dedicated mortgage advice team got right onto this and we were able to get this cost down. Off of this incident, we recommended that the customer use another conveyancer in the area near the property and we were able to drop the cost of the service to a significantly less £750; the estate agent was charging double this amount
Once you’ve made an offer on a property, the common train of thought would be that pretty soon you’ll get a phone call detailing whether or not your offer has been accepted. What often happens with estate agents instead, is they will call up and demand to know the conveyancer you have chosen.
Their questionable methods don’t end there, as following this they have a habit of refusing to take the property off the open market until you agree to use their in-house mortgage services.
As touched upon earlier, though these will be far overpriced, many crumble under the pressure and simply agree to please the agent and avoid losing their home (even though that shouldn’t happen). This is common with first time buyers in Cambridge who want their first mortgage experience to go smoothly.
As you’ve seen here, estate agents are notorious for making the process difficult and bordering on near harassment. A dedicated mortgage broker in Cambridge can help you with these situations and in some cases, bring the costs of other services down to a level that is fair. Now to answer a question you may be thinking at this point.
Absolutely not. These are highly illegal ways to conduct business. As a customer, you have the right to use whichever companies you would like during your home buying process. You have full freedom to use any mortgage broker or conveyancing solicitor that you wish to, it’s your personal process and personal choice.
Unless you explicitly sign a contract in the beginning to say you will only use their services (which you won’t be offered anyway), you have zero obligation to use their services for anything other than the sale process between yourself and the seller of the property.
Please always remember, when negotiating on the purchase price of a property; Should the people selling the property you’re looking to buy really know your personal financial circumstances, as well as the amount a lender is willing to let you borrow? This is a fact they will use to their advantage when pushing their in-house services.
Be wary and if you definitely don’t want to use their service, put your foot down and do not succumb to the pressure. Your future family home and financial situation all depends on how well your mortgage process goes.
We will always have your best interests at heart, keeping you informed throughout and jumping through those hoops on your behalf, so you can stay relaxed and happy. The information provided here is based on a genuine history of tactics used, that we wouldn’t wish others to go through if they can avoid it.
For all your mortgage needs, please do get in touch and we’ll do our very best to help you out, hopefully securing a great deal and your future family home in the process.
Circumstances where you are gifted money to contribute towards part of or all of your deposit are called a Gifted Deposit. This sum of money can be given to you by a friend or family member, on the condition that they don’t need to repay the money.
The benefits of gifted deposits are that they can help you in the circumstance where you can afford monthly payments but not the initial deposit. Furthermore, having a gifted deposit can mean that you are offered a better rate if the gifted amount is a lot.
In the instance where you can’t afford the initial deposit due to being on a low salary but you can afford to pay the monthly repayments, this can help you.
It’s common that your gifted deposit is from your parents, be this birth or adopted. When this happens, the method is referred to as ‘The Bank of Mum and Dad’.
Family members besides your parents can gift you a deposit, however, this does depend on the individual lender. You need to be careful when trying to find the right lender who can do this for you.
Gifting a deposit can be done through an equity release in Cambridge. This can only happen if the person who is gifting you the deposit is over the age of 55.
As a mortgage broker in Cambridge, we find that many clients aren’t aware that there is an option available where their parents can help with their mortgage, or sometimes clients feel like they can’t ask their parents for help.
In many cases, parents are happy to support their children’s property dreams by lending a helping hand.
Taking out a mortgage compared to renting can be believed to be more beneficial. This might be due to the fact that you would potentially pay less per month.
It can be common for a gifted deposit to be from an inheritance, but parents may gift it earlier in life. Sometimes, the deposit may be from parents saving up enough or releasing a particular amount of equity from their property.
Paying a deposit by using a loan isn’t an ideal option and is something lenders don’t always feel comfortable with people doing. There is the risk that you won’t have enough for not only the mortgage but the loan at the same time which is why lenders don’t always feel comfortable with this option.
The choice is yours when it comes to the maximum amount of deposit you want to gift. Sometimes, you need 5% of the deposit to be from your own pocket, however, this can depend on the lender.
If you are a first time buyer in Cambridge or a home mover in Cambridge, you can benefit from a gifted deposit.
Obtain a gifted deposit form to provide to the lender is required. In some cases, you might need to show some other proof and ID (donor ID/bank statement and so on) again, this depends on the lender.
Some clients come to us for specialist mortgage advice in Cambridge when their credit score is lower than the acceptable amount or they have missed payments. Adverse credit is a frequent occurrence and this is something that our mortgage advisors in Cambridge might be able to help with.
A potential factor that could effect you when obtaining a mortgage is if you have either missed a monthly mortgage payment or any smaller payments such as your mobile phone contract. This can happen through an attachment on your credit score that states your missed payments. From this, the lender could see that you are a risk.
However, missing monthly payments doesn’t always mean you can’t get a mortgage, but there is the potential risk that the high street bank may turn you down. This is especially the case if you only have a small deposit for the property you are looking at, as it may not be enough to convince a lender to lend to you. To prevent this from happening, you may need specialist help.
The lenders will want to know when the default was registered against you. The likelihood of receiving the necessary help depends on how far away you are from that specific date. In certain circumstances, like ill health, separation or redundancy, the advisor may be able to help even if it is a recent occurrence.
We have provided further information below that answer any common mortgage scenarios regarding bad credit mortgages in Cambridge.
Your mortgage advisor in Cambridge will want you to provide an up-to-date copy of your credit report and you can obtain one of these usually free of charge (check with the providers T&Cs). It is advised you have your credit report before applying for a mortgage and even more so if you have had any doubts about your credit history, as it gives your advisor an exact snapshot of your financial situation.
This depends on your circumstances. When it comes to the impact of bad credit, some customers may become a little confused. Despite having bad credit, with a sufficient income & enough deposit, it may be possible to obtain a mortgage.
Reassuring the lender that you can pay back your mortgages without the possibility of any late payments happening is key, as the lender needs to proceed with confidence. If the worst happens, your home may get repossessed, which the lender would want to avoid.
There are many routes to take when people who have bad credit are looking to get a mortgage, even if these routes may have higher rates of interest. The most appropriate next step when seeking a potential mortgage is to get in touch with a mortgage advisor in Cambridge (like ourselves) to help.
In some cases, you may find yourself struggling financially and are unable to keep up with mortgage payments you didn’t have trouble paying in the past. This isn’t an ideal place to be and even if this was a momentary lapse, it would still be on record as a missed payment.
Credit issues may occur during this period and this could become an issue for when it comes to getting a remortgage at the end of your term or a new mortgage after moving home in Cambridge. As mentioned before, this is based on risk. Can the lender trust you not to find yourself in that situation again?
Our mortgage advisors in Cambridge have a lot of experience when it comes to customers having bad credit, particularly when they have previously had or currently have a mortgage.
Other adverse problems customer could potentially run into regarding their credit are;
Even though these situations aren’t the best circumstances to find yourself in, it’s not the end of the road. The process may involve many challenges which involve you paying a higher rate of interest. There are many specialist lenders out there who may accept you depending on the nature of your circumstance.
We highly recommend that you work on improving your credit score. Our how to improve your credit score in Cambridge article is a helpful, in-depth mortgage guide that will hopefully put you on the right path to obtain a mortgage.
Here you’ll find out the basics that you need to know about agreements in principle, including the pros and cons of getting one. For more information, get in touch and speak with one of our expert Mortgage Advisors in Cambridge today. An Agreement in Principle (also known as an AIP or Decision in Principle) is where you pass a Lender credit score to qualify for a mortgage.
By obtaining an Agreement in Principle, you prove that you are ready to support any offers you make as a first time buyer in Cambridge. It may also help negotiate a lower price if you have one of these, as it shows the seller you are serious and have the means to continue with the process.
The more commonly seen methods of credit scoring are via soft searches rather than a hard search. These may still affect your credit score, though a hard search will usually be more likely to do this than a soft search.
Reasons come down to a hard credit search that can leave a credit footprint, whereas a soft search does not. Regardless, you can rest assured that whichever is used by the Lender is done with the best intentions.
Having your credit checked via a hard search every so often should not make too much difference. It becomes an issue if you take too many of these within a small amount of time. On the flip side, if you know you have a good credit score and the best path to take with a lender, this should not be a problem.
Whilst the prospect of this would be excellent, there are no guarantees that having an Agreement in Principle will allow you to get a mortgage. The Lender will still require seeing all your documents, and only then will an Underwriter make the very final decision.
Often we find that customers contact us after they got declined at the application stage due to missing some small print in their Agreement in Principle. You will need to provide ID to prove that your identity, payslips to prove your income and bank statements to prove you are smart with money before a lender offers your case.
Though you can make an offer without an Agreement in Principle, we would not advise doing so. Any credible Estate Agent will want you to prove you can progress onward.
It is possible to obtain an Agreement in Principle within 24 hours of getting in touch with an experienced mortgage advisor in Cambridge.
Typically, an Agreement in Principle will expire after 30-90 days. The good news is that this doesn’t mean you should apply for the first house you find. If your Agreement in Principle expires, it’s not difficult to obtain another ahead of making an offer.
Finding a mortgage only to be declined a mortgage can cause understandable disappointment. With this in mind, we recommend getting an Agreement in Principle as early as possible.
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Cambridgemoneyman.com & Cambridgemoneyman are trading styles of UK Moneyman Limited, which is authorised and regulated by the Financial Conduct Authority.
UK Moneyman Limited is Registered in England, No. 6789312 | Registered Address: 10 Consort Court, Hull, HU9 1PU.
Authorised and Regulated by the Financial Conduct Authority.
We are entered on the Financial Services Register No. 627742 at www.register.fca.org.uk
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