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What is a mortgage agreement in principle?

Last post Thu, Jan 17 2008, 11:41 AM by isioth. 4 replies.
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  •  Thu, Jan 17 2008, 11:41 AM

    Re: What is a mortgage agreement in principle?

    You would have to go through the whole process if you were borrowing more money yes - though they may be more lenient as she's a current customer with a history (presumably good). Assuming you're now being added to the mortgage they'd obviously want to check you out and ensure that your joint income meets with their lending criteria etc.

    I wouldnt necessarily say that staying with Nationwide would be quicker. I once did the same thing with my g/f being added to her Bristol & West mortgage and they were an absolute nightmare and very picky - the whole process took the best part of a month. That said, I believe that B&W are notoriously slow anyway and Nationwide may not be.

    • Post Points: 5
  •  Thu, Jan 17 2008, 10:11 AM

    Re: What is a mortgage agreement in principle?

    We are at the stage where our broker has asked us to bring in payslips and passports. So we are very much at the beginning of the process. My girlfriend already has a mortgage with Nationwide at the moment on a tracker rate. If we stuck with her mortgage but bumped it up, would we have to go through the full process, or, as they have all her details and already given her a mortgage, would the process be less full on?
    • Post Points: 20
  •  Thu, Jan 17 2008, 9:58 AM

    Re: What is a mortgage agreement in principle?

    In short it means that the lender you have (presumably) chosen is prepared to lend you £x based on the information so far provided - subject to certain conditions. If you havent done so already you'll be asked to provide things like Passport as id, bank statements etc etc and as long as the info you have provided through the broker is correct and any further checks the lender does come up clean, you'll be made a formal offer which is valid usually for 6 months.

    So in short, no it doesnt guarrantee you the funds, but providing you've been honest with the application then it should (and i mean should not will!) be a formality.

    As to how long the process takes - how long is a piece of string. Depends on the lender and how busy they are. This said, I'm not sure exactly what bit of the process youre talking about - if its just getting something agreed in principle it should be almost immediate. Its the next part leading to the formal offer that can take longer.

    Having just re-read your post it appears that you havent actually made an application yet - so yes this will mean filling out a full application form, so be honest.

    I'm sure one of the IFAs here can provide more detailed info as they deal with these on a daily basis.

    • Post Points: 20
  •  Thu, Jan 17 2008, 9:47 AM

    Re: What is a mortgage agreement in principle?

    Based on the information you give the lender and they say yes! this means that they will lend you the money providing that the information you give them is correct and your credit check is of satisfaction once this info is checked out.

    If they find something they dont like then they have the right to refuse to continue with the martgage.

    I was told this by my broker years age when I applied for my first mortgage. I believe I was told this in "blonde" terms.

    (I was blonde and needed simple explinations at the time! lol)

    Good luck to you both, It can be a very tough and trying time getting a mortgage, just remember if it was that easy to buy a property then everyone would have one!

    • Post Points: 5
  •  Thu, Jan 17 2008, 9:23 AM

    What is a mortgage agreement in principle?

    I am off with my girlfriend to get a mortgage agreement in principle through a broker?

    What does this mean?

    If we get it, does it mean we will be guranteed the funds?

    How long does the process take?

    Is there anything I should be aware of?

    What questions do they ask - is it a full application?

    • Post Points: 35