agreement in principal-what does this mean?

[f1slikki]

Hi there,

I am new to this site however am going through a mortgage for the 1st time, very daunting therefore any help would be great.
My query is how the mortgage process works, I have an agreement in principal through abbey and have submitted my proof of income etc to them for the full mortgage application but I am unsure what the in principal agreement means, have i been accepted or do the now do my credit checks and then decide.
Have been waiting since Saturday and not heard anything so I am starting to fret that something may have gone wrong.

any advise would be gratefully received.
many thanks

[Tiddler]

Hi,

An agreement in principle (or AIP) is exactly that - an agreement to lend you the amount you have asked for, based on the information you have provided them with so far. This will have also included a check on your credit file.

The procedure from here is to check the information you provided is correct, so checking payslips, references, bank statements etc. They will then do a valuation on the property you are buying to make sure there are no problems with the property and that they feel it is worth what you are paying for it.

If they are happy with that and everything else they will issue a Offer of Mortgage.

Sound pretty simple and straightforward doesn't it. Unfortunately there are very often delays inbetween each step of the process, as your file sits in a processing queue waiting to be actioned.

[f1slikki]

Hi there, Thanks for getting back to me, feel a little more knowledgable and will just sit tight and wait to see what happens.
many thanks