In This Guide
Apply for a mortgage
1. How much can I borrow?
2. How much can I afford?
3. Mortgage application
4. Mortgages online
5. Agreement in principle
6. Confirmation of offer
Buying at auction
Buying in Scotland
Conveyancing
Find and view
Negotiate
Plan your purchase
Success and failure
Surveys and valuations
To buy or not to buy
Apply for a mortgage
Agreement in principle
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Getting an agreement in principle can be a relatively simple task, but is one that is very worthwhile doing. Although you can get an agreement in principle on the web, over the phone, or in person, this is usually followed up by a written quotation.
This is a handy document to have. It shows any prospective seller that you mean business and can actually get a mortgage to cover the purchase price. On top of that, it provides a handy reference for some of the key features of your mortgage, and what your repayments will be for the introductory offer period, if there is one. You should also ask your lender (if they don't already include it in the quote) to clarify how much your repayments will be after the offer period, assuming interest rates remain at the same level.
Below is an example of a written quotation obtained from a well-known direct lender, which should give you a clear idea of what you might expect to receive. As you can see, it gives you quite a few useful details. You can get written quotations for repayment mortgages (often called Capital & Interest Repayment) or for interest-only mortgages. There is nothing stopping you from getting agreements in principle for various different purchase prices, to see how much your repayments will be and to gauge how much you can borrow.
FLEXIBLE MORTGAGE QUOTATION
Purchase price of property: 166,000
Total mortgage requirements: £149,400
(The quotation below may form only part of your total requirements and, if so, should be read in conjunction with any further quotations which have been provided).
Capital and Interest Repayment method
| Mortgage Amount | £149, 400 |
| Interest Rate | 4.6000 % per annum variable |
| APR | 6.00% variable |
| Credit Period | 25 years |
| Number of Instalments | 300 |
| Gross Monthly Payment | £838.92 |
| Total Amount Repayable | £251,676.00 (Gross) |
Additional Flexible Mortgage Conditions
- The interest rate has been reduced by 1.75% for the first 6 months from the date of completion, then for the next 30 months the interest rate will be reduced by 0.31% thereafter the interest rate will revert to our prevailing standard variable rate.
- The interest rate for the first 3 years from the date of completion will not be greater than 1.0% above the Bank of England Base Rate or, if this is no longer set, such other comparable rate that we choose ("Base Rate"). Any variation in the Interest Rate following a change in Base Rate will be made on the first of the month following the Base Rate change.
- Should you redeem your mortgage during the first 3 years from the date of completion, you will be required to pay an extra 3 months gross interest on the initial borrowing at the prevailing standard variable rate at the date of repayment.
NOTES:
The quotation given is valid at 6th November 1999. The figures provided are the terms on which we would consider providing a mortgage. A firm offer is unable to be made until a full application has been received and we are satisfied that our lending criteria has been met. This type of mortgage is only available to applicants of properties which are owner occupied. The property must be insured against all normal risks.
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