What is an agreement in principle?
An ‘agreement in principle’ is a conditional offer of a loan from a lender. Assuming the information you have provided, either via your mortgage broker or direct is correct; they will in principle offer you the loan you have requested. The lender won’t make a formal mortgage offer until a valuation has been carried out on the property you wish to buy. It’s a good thing to have an agreement in principle before you start house hunting as it can give you a head start over others looking at the same property. Both estate agents and sellers will view you as a serious buyer.
An ‘agreement in principle’ is an agreement from a mortgage lender that in principle they will lend you a specified sum for property purchase (subject to valuation of the property, verification of income and confirmation of any other checks they require).Therefore, obtaining an agreement in principle can be an excellent way to know how much you can afford when you start looking for a property. For this reason the ‘agreement in principle’ is an important part of our offering and very popular with our customers.
An ‘Agreement in Principle’ will usually involve the lender performing a credit check and address check on you. If you pass their initial criteria, they will normally supply you with a certificate which you can show to an Estate Agent as proof that you have passed the lenders initial checks. One thing to bear in mind is that an Agreement in Principle is not a guarantee that the lender will lend to you as it is always dependent on a suitable valuation of the property you wish to buy and on you being able to provide satisfactory proof of your address and income.
