Agreement In Principle
An agreement in principle is a way of establishing how much you are able to borrow from a lender, before you have actually taken out a loan. This can be especially useful if you want to take out a mortgage but don’t know how much you will finally be able to spend on a house. Although the arrangement is informal, and certainly subject to change if your circumstances change between the agreement in principle and the formal final offer of a loan, it can help speed up the paperwork as the lender will have to make an assessment of your situation (such as carrying out a credit check) to be able to offer the agreement in principle. They will therefore already have many of your details processed.
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