First time buyer

fitzparker

Hi Guys, looking for a bit of advice.

My partner and myself recently applied for a mortgage on Friday, its a small mortgage below what the max we can get is, so our bank manager said we should definitely get it ( fingers crossed anyway ) and will get back to us within a few weeks.

My question is, we are viewing a house tomorrow which we really like, there has already been 2 bids on it, after viewing should we make a bid and wait for mortgage approval ( if we get it ) is that legal?

or wait for approval and hope the house is still there?

also for surveyor etc. when do we get this done? after sale agreed? im not quite sure.

thanks

Scott.

com1

The Estate Agent will probably (eventually) ask for proof of funds at some stage during the bidding process - this appears to be in place to stop spurious bidding...

Also I would only get the survey done after going sale agreed (but before exchanging contracts - the deal is done (with few limited exceptions) after exchanging contracts)

cookiecakes

Hi Fitzparker. Have you gotten Approval in Principle yet? This is usually offered soon enough after your first meeting, if not there and then. We needed the AiP letter when our bid was accepted and we went sale agreed and we wanted to pay our deposit. I know our bank would only submit the full mortgage application for one particular house rather than a house in general so we then had to give proof that we had paid the deposit.

There's nothing legally stopping you making a bid though afaik although without the letter, you may get pegged as a time waster if they have to chase you for it.

Also we waited until our bid had been accepted and we had gotten our full mortgage approval before we sent a surveyor in. We didn't want to waste money on it if the bank turned us down.

fitzparker

Thanks Guys,

no did not get AIP ( not that i know of ) i might wait a day or two and give a phone call to the bank to see if i could get it?

on a side note, the bank wanted to see our solicitor fees etc in the account on top of our 10% ( which we have ) but was wondering, i presume the solicitor fees have to be paid at the end so was going to use this money for our deposit to give to the estate agent, what happens then when all papers are signed etc. does the estate agent give the deposit back to us/solicitor or does it go to the bank and they take it off the overall price of the house?

I'm confused about this part as we didn't really budget for a deposit on top of solicitor fees etc

AfterHrsProp

fitzparker wrote: »

Thanks Guys,

no did not get AIP ( not that i know of ) i might wait a day or two and give a phone call to the bank to see if i could get it?

on a side note, the bank wanted to see our solicitor fees etc in the account on top of our 10% ( which we have ) but was wondering, i presume the solicitor fees have to be paid at the end so was going to use this money for our deposit to give to the estate agent, what happens then when all papers are signed etc. does the estate agent give the deposit back to us/solicitor or does it go to the bank and they take it off the overall price of the house?

I'm confused about this part as we didn't really budget for a deposit on top of solicitor fees etc

No, you wont get your deposit back but it will come off the overall price of the house. So for example, you buy a house for 100k & need an 8% deposit. The initial booking deposit you give to the auctioneer will come off the 8%. so, 8000 deposit required, after booking deposit this will be 6000 assuming a 2% booking deposit is required.

You will need to take into consideration stamp duty aswell(1%) & the solicitor fees which will be around 1.5k to 2k depending on which one you choose. So overall for a property worth 100k you will need at least 11k in savings.

I wouldn't see the point in bidding on a property unless you have mortgage approval in place. Despite what the bank manager might say, different issues could come up in your mortgage application which you hadn't foreseen & it could end up taking longer than expected.

You would most likely be wasting your time & the sellers bidding on a property now

Balmed Out

AfterHrsProp wrote: »

I wouldn't see the point in bidding on a property unless you have mortgage approval in place.

You would most likely be wasting your time & the sellers bidding on a property now

I don't know, if you've met the banks shown and honestly disclosed your finances and financial history and your waiting on the rubber stamp for an amount well below what the bank say they would be likely to lend you id bid away.

fitzparker

@AfterHrsProp. thanks your basically right, we went for a 100k mortgage ( bank said max we could apply for was 150k ), to apply they wanted to see 12% ( which includes solicitor fees etc ).

so out of that 12% this will include our deposit for the property? does this go through the bank or do we physically take this out of our account and give to the estate agent?

Citizenpain

you give it to the estate agent directly

AfterHrsProp

fitzparker wrote: »

@AfterHrsProp. thanks your basically right, we went for a 100k mortgage ( bank said max we could apply for was 150k ), to apply they wanted to see 12% ( which includes solicitor fees etc ).

so out of that 12% this will include our deposit for the property? does this go through the bank or do we physically take this out of our account and give to the estate agent?

yes, the 12% does include the booking deposit for the property & you would usually give this by way of a bank draft to the estate agent.

Your solicitor should deduct the 2% booking deposit from the overall deposit required from you