Mortgage in Principle

Fight_Club

Hi quick query if I can.

I thought a mortgage in principle meant that a bank would say "you can have that product at that rate for x months, even if we change our rates, during the x months, while you look for a house".

However I went to see Barclays and they wouldn't do that, they said they'd give me a mortgage but would have to come and see them when I found a house.

Well I started looking and now they've withdrawn the product I wanted?

So do thes mortgage in principles exist or have I misunderstood somewhere along the line? If they do exist I don't suppose anyone knows if the post office do them because they seem to be offering the best deals for me at the moment.

Thanks in advance.

nw_man

Fight_Club wrote: »

Hi quick query if I can.

I thought a mortgage in principle meant that a bank would say "you can have that product at that rate for x months, even if we change our rates, during the x months, while you look for a house".

However I went to see Barclays and they wouldn't do that, they said they'd give me a mortgage but would have to come and see them when I found a house.

Well I started looking and now they've withdrawn the product I wanted?

So do thes mortgage in principles exist or have I misunderstood somewhere along the line? If they do exist I don't suppose anyone knows if the post office do them because they seem to be offering the best deals for me at the moment.

Thanks in advance.

I think you have misunderstood.

An agreement in principle simply means a lender agress to giving you a mortgage subject to you being able at application stage to provide the required information and documentation, i.e. payslips etc

It does not specify a particular product.

_Andy_

An approval in principle refers to lending you that amount, rather than the rate.

Saver-Rob

I can confirm (as if I need to) that the above posters are correct. My girlfriend and I got a mortgage in principle from Britannia and arranged a fixed rate, length of loan etc. However we did not end up buying the first house we wanted and therefore had to go back 2 months later after finding somewhere else (the place we are now buying). The 'issue number' of the offer was indeed withdrawn however the mortgage in principle did mean they had already agreed to lend me the money - just that the exact rates were to be determined when we signed the paperwork.

Conrad

Of course no lender can hold open rates as the money markets change on daily basis, and in any event the lenders would end up with millions in reserve, but a lot of those people will never come back, and in the meantime if rates improve they would be left with tranches of cash with no takers.

Fight_Club

Ok thanks a lot for your informative answers. It would be nicer if things were a bit less dynamic in the mortgage market that way you wouldn't feel like you made a mistake cos you signed a mortgage one day only to find a new better deal out the next (or at least less chance of it). If that makes any sense at all.

ernie100

I have recently applied for a mortgage with Yorkshire Bank and I produced bank statements for previous 4 months and wage slips for previous 3 months. They did a credit check on me which shows up on Experian. Im left confused as to what checks they will make once I find a house? If I find a house tomorrow, and put an offer in, what further checks do the bank make?

happybroker

ernie100 wrote: »

I have recently applied for a mortgage with Yorkshire Bank and I produced bank statements for previous 4 months and wage slips for previous 3 months. They did a credit check on me which shows up on Experian. Im left confused as to what checks they will make once I find a house? If I find a house tomorrow, and put an offer in, what further checks do the bank make?

Probably the same again. I would imagine that the checks done so far where by a mortgage seller rather than an underwriter and also the dreaded computer. If the details the mortgage seller entered into the computer tally with what your documentation states then you have nothing to worry about although the available rates may change.

The OP had an AIP issued to him before a credit check was done which is where the problem appears to be.