Mortgage offer in principal

[itsallyellow]

What does this mean? I have applied for mortgage and have recived an offer in pricincipal.

[Ethel]

It means you have fulfilled the criteria to be offered a mortgage - it is now dependent on the property satisfying the criteria.

Usually.

[itsallyellow]

Ethel, does that mean that they do a survey on the property to see if its worth the money they are lending us ( which is �105,700, we put a �12'000 deposit down for �117'000 property ) so should we default they can get the money back from the property.

[WoWo]

Yes, they need to be sure that the mortgage will be recoverable if the you default on payments. The point of a mortgage is that it is a loan secured on an asset (usually a property). The asset needs to be worth equal or move than the mortgage amount to ensure the lend get get their money back.

an offer in principal can also mean the offer is subect to the supplied information being verified.