what does a mortgage in principle mean?

sallyann81

i have found a house i want im a first time buyer
was told i have a mortgage in principle so does that mean im guranteed one?
the mortgage advisor asked me lots of questions
i didnt mention a big credit card debt only smaller ones as when i did a credit check on me the debt did not show up! does that mean they didnt find it either? as i was told i have a mortgage in principle
i am going to make an offer on a house monday.
my mortgage advisor said he could rush it all through in 4 weeks
is this correct and could i be refused even though i have an offer in principle?

GMS

A decision in principle means you have passed the first stage with a lender. Next stage could mean underwriters look at teh application and may ask for further information. At any point the lender can choose to decline the application.

Not telling the broker about your debts is a silly move. Firstly it gives a false impression of your financial situation, and secondly it could come back and cause major issues. If the debt is found the first question will be 'Why did you not tell us?' You may need to provide bank statements to the lender which may show payments to an undisclosed debt. That could mean a decline.

Lenders share information with each other so any discrepancies between applications will be flagged.

Your credit card bill may be on another credit search. Lenders generally use either Experian or Equifax, and data can be different.

Above all else if you are not telling the truth regarding your application it would indicate that you know it is not affordable with the credit card debt. Why put yourself into a situation which could prove to be a disaster?

Your In Principle decision is merely the first hurdle.

sallyann81

i can afford it i pay more now on rent and always pay the debts every month
i checked the 2 agencies you said and its not on there so i thought it will never show
i didnt tell broker as it didnt show when i did a check and im scared admitting owing 14k would affect my chances even though i can pay it

so after imake an offer what other things will i be asked to provide?

dunstonh

is this correct and could i be refused even though i have an offer in principle?

if lending criteria changes between being given an agreement in principle and application, you could be refused. Or if new information comes to light about your status or you gave incorrect information.

It is a basically a "based on what you have told us, if that is true, we so no reason why we wouldnt lend to you if you applied today".

sallyann81

i have never missed a payment and pay quite a high rent as well as the debts so even if they found it i can still afford the repayments
the mortgage calculator was 200 pound a month less than i pay in rent so i can afford it

_Andy_

OP - you do realise you've made a fraudulent application?
and that your payments to the CC (which you claim you can 'afford' but clearly can't afford to pay off) will show up on your bank statements which the lender will ask for?

beecher2

As has already been said, the payments will show up in your statements and you'll be caught out for lying. Foolish move - I feel sorry for the vendors who will think they've sold their house.

Senior_Paper_Monitor

I spent most of yesterday being scathing about a (rare) mortgage broker who was encouraging/forcing (without the applicants' knowledge) an applicant to let them handle an application on their behalf with false information. My opinion - they (the broker) should lose their licences/approvals.

This situation appears to be the reverse - odds (in my opinion) are 80:20 that the hidden debt will be discovered (there is more than one credit reporting system that the lenders have available to them) during the application process. A cany broker will pick up on the additional payments when he/she inspects your documents prior to full application. A cany (and they mostly are) lender will do so similarly. The first will result in you being saved further grief. The second will result in a rejection and it may result in further action - either fraud based or shared data based info affecting your future cedit status.

I hope the broker whose time you have wasted, lied to (even you admit he/she "asked lots of questions" and "you didnt mention a big credit card debt") and have (without his/her knowledge) entrapped them in your fraudulent application has had the sense to take a fee from you in advance.

My opinion - you (the customer) should lose their right to any future credit! aaah - and yes you may well do so !

Apple45

Just got a mortgage on principle this afternoon. It was a bit intense and we were asked about our credit cards and I was 101% honest. If they find out you have lied, you will trip up I am sure. Honestly the best policy.

GMS

sallyann81 wrote: »

i have never missed a payment and pay quite a high rent as well as the debts so even if they found it i can still afford the repayments
the mortgage calculator was 200 pound a month less than i pay in rent so i can afford it

If this is the case then why did you feel the need to withold the information? If your credit card is being maintained and you feel it is affordable then you have no reason to not disclose it.

You would be advised to come clean to your broker asap as having all information to hand will make his/her job much easier. As it is you have placed them in a very dangerous position in that they may not be able to help you due to not having the information, and also opening them up to scrutiny fom the lender for not providing full details (which they were not aware of).

As Senior Paper stated there was a post on here where a rogue broker had caused major distress to a family. This could have the opposite effect, with the broker being compromised.

Come clean and you will get the best advice. It may not be the answer you are looking for but it will be the correct one.

bigianw

dont worry love i have a big debt and my mortgage advisor rang me this morning to say im approved! you will be fine. all they want from me is a utility bill, no more checks no bank statements they only wanted pay slips and passport as they have the info i gave them just b4 i was given a mortgage in principle
they didnt find my debt so they wint find yours ingnore some people on here love youl get approved just like me good luck