What is the difference between a mortgage agreement in principle and a mortgage offer?

What is a mortgage agreement in principle?

What is a mortgage agreement in principle?A mortgage agreement in principle, also known as decision in principle, is a written confirmation from a lender to say that in principle they would lend a certain amount of money to a particular prospective borrower based on some basic information. In most cases a decision in principle will be undertaken by a lender prior to any application being formally made.

What is a mortgage offer?

A mortgage offer is granted when you have completed all of your checks and everything is satisfactory. A valuer will also have been out to the property you are purchasing to carry out a mortgage valuation on behalf of the lender. If this comes back with no issues and all other criteria are satisfied you will receive a formal 'Mortgage Offer' which is a formal document confirming that your mortgage loan has been agreed. The Mortgage Offer includes a full illustration of mortgage costs and terms. A copy will be sent directly to your legal representative who will then be able to finalise the purchase on your behalf. You may also receive an email or a text message to confirm that the mortgage has been offered.

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Published on 22 April 2016

Source Trinity Sales Wakefield

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