If you are looking to purchase a property, you may come across the terms ‘mortgage agreement in principle’, ‘mortgage in principle’, or ‘agreement in principle’. These three terms all refer to a statement from a lender saying that they agree ‘in principle’ to provide you with the borrowing you require subject to your information declared being verified, and the property you find being suitable to lend against.

A mortgage in principle is designed to give borrowers a strong indication of how much they may be able to borrow and some reassurance that they meet the lender’s basic lending criteria. As soon as you’ve made up your mind to start home-hunting and have an idea of what you may need to borrow, it’s generally a good idea to apply for a mortgage in principle.

This way you can start to search the property market with the confidence that you should be able to obtain the level of mortgage borrowing that you will eventually need to support a property purchase in the property price range you are looking at.

[Read more…]