What is a mortgage in principle?

Most people know that a mortgage is a loan by a bank or building society to secure the purchase of a property, but what does it actually mean?

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A mortgage agreement is a statement from a lender to confirm that they will loan the money needed to purchase a property. It shows the seller that the purchaser can afford the property and it can be especially useful when there is more than one purchaser interested, as a buyer with a mortgage already in place may secure the sale.


A mortgage agreement will be subject to certain conditions, such as confirmation of income and an application being submitted. If there is a delay between the date the mortgage is agreed and the date the mortgage is officially applied for, the lender may amend their offer, especially if interest rates have changed in the meantime. When this happens, the purchaser may also decide not to go ahead with the lender and find an alternative mortgage provider.

Credit rating

All lenders will require evidence that a purchaser can repay the mortgage and as well as requiring evidence of income, they will also undertake a credit check. The type of search will depend on the amount being borrowed and if there is anything showing up on the purchaser’s financial history that may give cause for concern. For example, if it shows recent applications for credit, or if it shows several searches, this may indicate that the purchaser has made multiple applications, which may suggest a problem with repayments.

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Buyers looking to buy a home in the East should invest in a home buyers survey Cambridgeshire which will ensure there are no hidden problems with the property. A home buyers survey Cambridgeshire could also highlight issues which can be used to negotiate when agreeing a price for the property.

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Despite predictions of a ‘Boris Bounce’ to the property market following the General Election result, financial lenders are being cautious.


Any purchaser who is wanting to apply for a mortgage, but concerned or worried that they may be turned down, should check that their financial history is accurate and try to sort out any issues before applying.

Purchasers buying a property in Scotland will need to have a mortgage in place before making an offer on a property.