Mortgages
Get a mortgage agreed in principle before you begin looking for a property, that way you know how much you can afford to spend on a property. This also puts you in a favorable position when making offer.
What is a mortgage agreement in principle?
A mortgage agreement in principle also known as a mortgage promise by some
lenders basically means the lender has completed their credit checks and
subject to confirmation of the details you have provided references etc...
and the property being suitable security (after the valuation), the lender
has agreed to advance you a mortgage. This provides you with the assurance
that you can get the mortgage loan amount you require and the lender is
willing to lend. The mortgage agreement in principle will be valid only
for a short time usually 1 to 3 months.
Is the mortgage agreement legally binding?
All lenders can in extreme circumstances at any time prior to completion
of your property purchase withdraw its agreement in principle and the full
mortgage offer if they feel that there has been non disclosure or if your
financial circumstances have changed and you can no longer afford the mortgage.
Also any disclosures you make to your solicitor will also be reported back
to the lender as the solicitor not only has a responsibility to you the
buyer and but also the lender. The lender is therefore not obliged to give
you a loan even if you have an agreement in principle, because its not legally
binding.
