So, What Is a Mortgage Agreement in Principle?

08 November 2021

What an agreement in principle is

Sometimes referred to as a ‘decision in principle’, an agreement in principle is a document from your mortgage lender, stating how much the lender is prepared to lend you for a mortgage.

This document will help you define what budget you have to make offers on properties, as you’ll know how much you can afford to spend.

How do I receive an agreement in principle?

You can apply for an agreement in principle through your chosen mortgage lender, many have an online application process available.

A mortgage adviser can help you with this and can advise you on the most suitable lender to apply to.

When applying, the lender will check your credit file to establish if you are eligible for a mortgage, and if you are deemed a suitable and ‘safe’ prospect for a mortgage.

You will be required to provide personal information such as your name, date of birth, recent address history and an overview of your income and outgoings.

Is it essential I get an agreement in principle?

It is not a legal requirement to obtain an agreement in principle, therefore you don’t require one to start house-hunting. However, selling estate agents may want to confirm that you have one, as it shows you are serious about buying and therefore can afford the home they are marketing. 

Having an agreement in principle also helps you understand how much you can afford to spend on a property. If you have had credit problems in the past, or if you are a first time buyer and aren’t sure how much of a mortgage is available to you, an agreement in principle can provide added reassurance to help you begin your property search.

Things to consider about agreements in principle

It is essential you remember, an agreement in principle is not a formal mortgage offer, nor is it a guarantee that you will receive a formal mortgage offer. You will only receive a formal mortgage offer when you have had an offer accepted on a property, when your lender will require a satisfactory property valuation and will then delve deeper into your credit history, earnings and expenditure.

The agreement in principle may be subject to change if your personal circumstances alter in any way, ie., you change jobs, you decide to buy with a partner or friend, or if a larger deposit becomes available to you.

2021

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2020

Tayside housing market back with a bang 2020-12-10 Digital Guide 2020-05-27

2019

The property market across Scotland - Quarter Two 2019 by SPC Scotland 2019-10-16 LORD PROVOST OPENS NEW-LOOK CENTRE 2019-09-17 The Dundee property market 2019-06-24 A 427 MILLION BOOST FOR THE HOMES MARKET 2019-01-21

2018

Budget Proposals to the ADS Rate 2018-12-18 BUYING OR SELLING GET THE FACTS 2018-08-24 BUYING INTO LIFE ON THE WATERFRONT 2018-08-23 As moving day looms dont panic just prep 2018-05-17 THE BEST OF BOTH WORLDS FOR HOMEBUYERS 2018-04-03 HOME COMFORTS FEND OFF BEAST FROM THE EAST 2018-03-07 V&A DATE MILESTONE FOR THE WATERFRONT 2018-03-02 FLAT SALES EDGE TOWARDS £100 MILLION 2018-01-23 PROPERTY SALES PUSH TOWARDS THE £440 MILLION MARK 2018-01-08

2017

FESTIVE GREETINGS FROM ALL AT THE TSPC 2017-12-19 PUTTING DUNDEE ON THE MAP 2017-11-15 TIME TO BRING YOUR HOME TO THE MARKET 2017-11-01 AUTUMN IS A GOOD SEASON FOR SELLING 2017-10-17 HIGH PROFILE OPTION FOR TOP PROPERTIES 2017-10-09 MARKETING YOUR PROPERTY TO THE MAX 2017-08-21 DO YOU LIKE TO BE BESIDE THE SEA? 2017-06-15 TIME LOOMING FOR A RE-MORTGAGE 2017-06-09 HAS THERE BEEN A BETTER TIME FOR A HOUSE SALE 2017-05-26 TIME TO PUT YOUR FLAT ON THE MARKET 2017-05-04

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