What is an 'Agreement in Principle'?

An agreement in principle is a document from a mortgage lender that indicates how much money a buyer can borrow. It details to the buyer how much ‘in principle’ they would lend to the prospective borrower based on some basic information. 

Having an agreement in principle can make buyers appear less of a risk as it shows, in theory, what a a buyer can afford. It also allows the buyer to have a better idea of what properties are in their price range.





 

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