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
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
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.
In message , Ronald Raygun writes
10/10
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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