Where can I get one? You can arrange an agreement in principle with your chosen bank or building society. Many people enlist the help of expert mortgage brokers who are able to compare rates for you across the market to get you the best deal for a fee. Once you have an agreement in principle there are other costs that come a little further down the line that you have to account for before the hunt for a home can commence:
What is an agreement in principle? This will let you know roughly how much you’ll be able to borrow so that you can start to look for homes within your price range. In order to obtain an agreement in principle you will need: Exact details of your total income Details of your regular expenditure Note: The size of your deposit and your credit rating may also impact the amount a lender is willing to loan you.
Top tip Many mortgage advisors will be able to give you an estimate of the amount you can borrow based on your income and regular outgoings. This is useful to get an idea of what you will be able to borrow, but it does not constitute a full agreement in principle. As a general rule, most lenders will be willing to lend you between 4 and 5 times your annual salary. However, this does vary between companies and you will need to contact them for their particular rates.
Valuation fees There are two types of valuation. The first is a mortgage valuation. This will give you the value of the property you are looking to buy. The second is a survey and valuation (also called a Homebuyers Report). This is a more in-depth review and will give you information on any defects or problems which may well impact the home’s value.
Legal fees This is the money you will need to pay a solicitor to organise the contracts and other legalities. The cost of this varies between companies so it is well worth getting a few quotes. Additionally, Search fees and Land Registry fees are usually included in these quotes so that is another thing worth checking!
Removal costs This is simply the cost incurred when moving all of your possessions from your current home into your new one.
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