Agreement in Principle - what’s the principle?

[LadyHalesBroach]

Got our AiP, offer accepted (!) and conveyancer booked.

Is there a financial hurdle to go through with the mortgage lender approving the loan, or is that all done now?

(We’ve got a 15% deposit)

Or is the ‘in principle’ more to do with the value they put on the house/their survey?

Oh and we’ve done it through a broker, if that matters.

In principle (or in theory) you can afford to pay back the amount you want to borrow.

The actual application will include a more detailed look at your finances, including a credit check. At that point either the lender will say yes, the principle was correct and you can afford it, and your record shows that you have the ability to do so; or they will say, well in theory you could but in practice, when we look in more detail, we aren't willing to take the risk of lending to you.

The lender still needs to do the underwriting, for example assessing your payslips/accounts and bank statements. Once that's done and improved there may be a valuation of the property and then you should receive your formal mortgage offer

Oh gosh I didn’t realise. Now I’m freaking out that the less-than-good upkeep of store adds a few years ago will bite me. I’ve worked so hard to pay off and save.

How often do DIPs go the wrong way? 50/50?

It's definitely better than 50/50! If you've paid off cards, and - ideally - kept using them but paying them off each month, you will probably be ok.

You can check out your credit history yourself, that will give you a good idea. www.moneysavingexpert.com/creditclub/ also gives you info on getting/keeping a good credit score.