What is a mortgage in principle
A "mortgage in principle" is an offer made by a mortgage lender, giving you "in principle" the loan that you have discussed with the mortgage provider. This is obviously dependent on the accuracy of the information you have supplied to the lender.
To get a "mortgage in principle" you will need to supply the same information to the mortgage provider as you would if you were applying for a mortgage.
There are many reasons why it is advantageous to get a "mortgage in principle".
- It helps to know how much money you can borrow before you start looking for property. This will avoid any disappointment when looking at properties you think you can afford, only to realise when you apply for a mortgage that they are out of financial range.
- Having a "mortgage in principle" will save you time and sellers will take you more seriously (don't forget they want a quick, smooth sale as much as you do).
- If you have a "mortgage in principle" and another buyer is interested in the property you have set your heart on, you will be one step ahead of them because you have already organised your finance.
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