Purchasing a property in the Wyre Forest and Shropshire is something you do in stages, and an early step towards owning your property is obtaining your MIP or mortgage in principle (sometimes called a DIP – Decision In Principle or an AIP – Agreement In Principle).
Once you have a mortgage in principle, you can progress onto the next step of buying your property. A MIP shows both sellers and their estate agents that you’re serious and also in a suitable position to move on with the purchase.
It’s important to be aware, though, that obtaining a mortgage in principle doesn’t mean you’re guaranteed a mortgage.
The team here at Doolittle & Dalley are on hand to answer all your questions!
What Are Mortgages In Principle?
A mortgage in principle is an agreement from your mortgage provider that states they’re willing to allow you to borrow a certain sum from them to purchase a property. Their decision about whether they’ll issue you with a MIP is based on all the information and documentation you give them, but it’s vital to note that mortgages must still be underwritten before the lender can make you their formal offer.
Your lender may withdraw the mortgage in principle for a variety of reasons. Therefore, rather than being a mortgage guarantee, they should be viewed more as a guide to affordability. Since the checks lenders carry out at this stage are quite basic, it’s possible certain details could emerge when they scrutinise your application more thoroughly.
Therefore, obtaining your mortgage in principle represents an essential step, however, it doesn’t give any assurance that your lender will offer you a mortgage of identical value once your formal application is submitted.
What Problems Can There Be With A Mortgage In Principle?
Lenders only carry out rudimentary checks before agreeing to your mortgage in principle. However, when they process your formal application, they’ll be more cautious. Your MIP could be withdrawn for reasons including:
The property you want to buy will also be taken into account as some property types are not mortgageable. For example, if you want to buy a home that’s deemed to be uninhabitable or derelict at present, or if the property is at risk of flooding or has structural issues, you may struggle to get a mortgage through conventional means.
Do I Need A Mortgage In Principle?
Yes, it’s wise to have a mortgage in principle in place. Here’s why:
If you’ve already arranged your mortgage in principle certificate and are ready to buy a home in Kidderminster, get in touch with our team at Doolittle & Dalley. Give us a call on 01562 821 600 or drop an email to email@example.com and we can help you find your perfect new home in the Wyre Forest and Shropshire.
Kidderminster Office: Estate House, Proud Cross Ringway, Kidderminster, Worcestershire DY11 6AE / 0345 3700 300
Bridgnorth Office: 46 West Castle Street, Bridgnorth, Shropshire, WV16 4AD / 01746 763336
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