Decision in Principle


J

Jaffe

I am a first-time buyer and despite having a little credit history
over 5 years ago which I was forthcoming about, I got an agreement on
a decision in princple from a lender. Now I am starting to look at
houses but I just wondered how the decision in principle works - I
know it's not a concrete promise that the lender will give me a
mortgage but what would make the lender change their mind from the
decision in principle to actually offering a mortgage?

thanks for any info on this.

Jaffe
 
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P

Peter Gradwell

I am a first-time buyer and despite having a little credit history
over 5 years ago which I was forthcoming about, I got an agreement on
a decision in princple from a lender. Now I am starting to look at
houses but I just wondered how the decision in principle works - I
know it's not a concrete promise that the lender will give me a
mortgage but what would make the lender change their mind from the
decision in principle to actually offering a mortgage?
Normally, when you turn up with the house details and says "I've had
my offer accepted, will you give me the money", they get their finger
out...

peter
 
R

Ronald Raygun

Jaffe said:
I am a first-time buyer and despite having a little credit history
over 5 years ago which I was forthcoming about, I got an agreement on
a decision in princple from a lender. Now I am starting to look at
houses but I just wondered how the decision in principle works - I
know it's not a concrete promise that the lender will give me a
mortgage but what would make the lender change their mind from the
decision in principle to actually offering a mortgage?
Lenders don't give mortgages, borrowers do.

The decision in principle will have been within certain parameters,
e.g. "we will lend you up to £x provided this is not more than y%
of the property value", and will have been based on your
circumstances. There will also be a time limit. It you come back
3 years later and want to borrow twice the amount, and you've just
been made redundant, you might be in for some disappointment.

Also, the survey will have to be OK and the valuation will need
to support your offer.
 
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J

john boyle

Ronald said:
Lenders don't give mortgages, borrowers do.
10/10

The decision in principle will have been within certain parameters,
e.g. "we will lend you up to £x provided this is not more than y%
of the property value", and will have been based on your
circumstances. There will also be a time limit. It you come back
3 years later and want to borrow twice the amount, and you've just
been made redundant, you might be in for some disappointment.

Also, the survey will have to be OK and the valuation will need
to support your offer.
Yes, for a decision in principle the lender generally undertakes a
credit search and performs a credit score. It doesn't ask for any proof
of anything, so generally no payslips etc., It usually means, "you seem
ok on our computer, when you come back and prove that you are who say
you are, you live where you say you live, and you earn what you said you
earn with whom you said you worked for, and if you can prove that your
rent/existing mortgage payments were made on time, and nothing has
happened to you since you applied and it isn't more than three months
ago and if you give us a cheque for the valuation, then we'll send a
valuer round and if everything is still OK, then we will probably lend
you the money we said we would subject to you having at least the amount
of deposit you said you had, but we might not.
 

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