Almost all home builders require buyers to exchange contracts within 28 days of booking a new home. The requirements of this tight deadline (imposed on homebuilder buyers) are often difficult for lenders, so it`s worth getting a mortgage offer “in principle” before you even expand. A decision of principle shows that one can theoretically afford to buy a property. This could make you a more attractive buyer and pull you away from other potential buyers. If you`ve had credit problems in the past or have a limited credit history and aren`t sure what a bank or home loan union might lend you, an agreement in principle could give you an additional guarantee in your credit perspective. Some lenders give you a certificate if they offer a mortgage in principle, which can be useful for showing real estate agents. What this implies varies by lender, but could be a) an explanation that they are willing to lend the amount requested, b) the maximum amount they are willing to lend, or c) simply a statement clarifying that your mortgage application has been accepted in principle. If you buy a new property, you are normally asked to pay the client a booking fee of £500£1000 to show your intention or obligation to purchase. Once this has been agreed, you will need to pay a deposit (normally non-refundable) of 5% to 10% of the purchase price.
Remember, this is not the same as your mortgage deposit. For this reason, it is always worth consulting a mortgage advisor about your circumstances. You have in-depth knowledge of the market and present your options.