The mortgage lender will then review your loan file to assess your financial situation and calculate what they might be willing to lend you. In principle, a mortgage is also called a policy decision (PID), memorandum of understanding (AIP) or mortgage promise. This is a statement from a lender that says they will lend you a certain amount before you finish buying your home. When you buy a property in Scotland, you need to buy one before placing an offer. You will then be offered a mortgage based on what the lender believes you can afford. This may be more or less than you originally expected. Having a mortgage in principle is not mandatory, but there are several good reasons to make one. It can also be the property itself that makes you be turned down for a mortgage, e.B. if it is listed, previously used for commercial purposes or recently affected by subsidence, that is, the gradual sinking of land that causes the ground to collapse under a house. A basic mortgage – also known as a Memorandum of Understanding (MOU) or Strategic Decision (DIP) – is a written notice from a bank or construction company (the lender) that indicates how much they might be willing to lend you. It`s not constraining (they might still deny you a mortgage on these terms), but it`s a very useful indicator of what you can probably borrow, and real estate agents take it seriously.

There will usually be no fees from a lender or broker for a mortgage in principle. Usually, a mortgage broker doesn`t charge until your mortgage business is secure (and sometimes not even then – learn more about how mortgage brokers charge). Your mortgage broker or lender will ask you several questions that cover areas such as your income, expenses, the type of work you do, your credit history, and the amount of your deposit. Here`s what you need at your fingertips: The size of your deal can basically be a useful indicator of how much you can borrow. .