Mortgage In Principle

Joeread

Hi

I am selling my house at the moment and when I have had an offer put in I am going to get a mortgage in principal, at the moment our LTV is 83% for a house worth 500,000. If I found a place for 515,000 and the mortgage provider originally said we could borrow up to £415,000 before the mortgage in principal can we change that or is it best to get a mortgage in principal at the most we can borrow even if we don't us it all and may find a place for 490,000?

Or does the mortgage in principal say you can borrow between say £500,000 to £520,000?

Thank you

csgohan4

MIP is just a piece of paper saying 'you could' borrow x amount. It doesn't mean you are guaranteed. Ensure you fit the affordability calculator's over various banks to see you can afford it

kingstreet

It's for the loan amount, not the purchase price.

The lender will be looking at affordability and loan to value, so at some point, you will hit the maximum of one of those.

For example - If you have an AIP for £515k, it's the mortgage amount, not a £515k purchase price.

If your maximum LTV is 85%, you can buy for upto £605k with £515k mortgage.