Agreement in principle

cazmeg

We have applied for a mortgage and have it agreed in principle. Can anyone explain what this really means? Thanks.

homer_j_3

it means that on the information supplied and credit checks done, the lender has agreed to lend you the money.

So it means they are willing to lend you the money

dunstonh

An agreement in principle can be subject to credit check. It doesnt have to be after credit check.

I would refine homer_j's response a little by saying that it is "an agreement to lend you the money if everything you have said so far is confirmed and no new information comes to light which may impact on that lending decision".

makingendsmeet_2

I'm pretty sure that an "agreement in princible" is hardly worth the paper its written on. It basically means on the information you have supplied i.e amount you wish to borrow/deposit/income you meet the lenders critiria. But in order to be issused with a formal mortgage offer you have to pass the various credit/employer checks and of course the valuation survey. Even after all that it can all go wrong when they transfer all the information and supporting documents to there underwriting department if they are not happy then its back to square one. We are just about at the underwriting stage after 4 weeks of waiting. :money:

cazmeg

Thanks, the answers are a bit varied. Is it more straight forward if you self- certificate?

android_2

who are underwriters do they work for mortgage company??

makingendsmeet_2

I think some lenders use in house underwriting and some don't. I did read somewhere on here that computers do alot of the underwriting nowdays.

Ian_W

cazmeg wrote: Thanks, the answers are a bit varied. Is it more straight forward if you self- certificate?

Not unless you have income you can't prove. In fact I believe it can lead to tougher and more thorough underwriting because you're claiming you earn income but can't prove it in the normal way so you're potentially a bigger risk.

If you have normal proveable income stick to normal application route. BTW dunstonh's description of AIP is the most accurate IMO.