We talk to alot of clients during a normal working week, some are coming to us first and others have been speaking to either other lenders and brokers. Some are armed with an in-principle decision, so what is that worth?
Many seem to be under the impression that an in principle is as good as an actual offer. Simply put, it isn’t – not even close. Certainly it’s indication that a lender is interested to look deeper into your project with a view to potentially funding it, but it cannot be relied on as a firm offer of funding for your building project.
We send our in principle decision to clients when we are genuinely interested to fund a project, though our initial “yes”, we believe, is firmer than most others for a couple of reasons.
Firstly we do not say yes to everything and then ask for a fee, no matter how small, to proceed with the application. So, if we move forward with an application we are spending our time and resources which we do not want to waste on being busy for the sake of it. Being paid at the end means that we do not benefit from saying yes for the sake of it.Some will say yes just to get you off the market. The theory being you have had a positive response and so will be so relieved and happy you will stop searching and go with that company. This takes you off the market and hopefully stops you from continuing to shop around for something else. Again, not something we do. Though we always look for reasons to lend, we are not afraid to say No to projects if we don’t think it is right.
We will only give out figures when we are sure we want to lend, based on the information we have at the time. Our process would be to collect as much information as we can in the first contact then set to work straight away. This will involve looking at comparables, the local area, the particular site and the figures involved.
In our opinion you can’t give a proper decision without certain information and without doing some initial investigation. This is not a standard mortgage where it is just a box ticking exercise or it fits on a prescribed set of rules.
So, when we say “yes” we really do mean “yes” – not “maybe”, not “possibly” and not “we might”.
Yes is yes.