Mortgage in Principle
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What is a Mortgage in Principle?
A Mortgage in Principle – also known as an Agreement in Principle or Decision in Principle – shows how much you might be able to borrow from a chosen lender.
You or your broker provides some personal information to a bank or building society, and they check it against their records and policies. If successful, you receive a certificate indicating acceptance.
Remember, a Mortgage in Principle is not a full mortgage offer, and you’ll still need to submit a full application. The amount on the certificate isn’t guaranteed yet either.
Does a Mortgage in Principle show the most you can borrow?
Some lenders will give you a certificate for the maximum amount they can lend you. Others will show the specific amount you ask to borrow.
Does a Mortgage in Principle affect your credit score?
Most lenders do a soft search at this stage, which doesn’t impact your credit score and is only visible to you.
However, a full application involves a hard search, visible to other lenders. If lots of hard checks appear on your record, lenders might think you’re struggling with finances, making mortgage approval less likely.
How quick is a Mortgage in Principle?
You usually find out if you are accepted on the same day you apply because lenders use automated systems to perform checks immediately. The result is typically an accept or a decline.
Sometimes the system refers your application to a human for review, which might take a couple of days.
How long does a Mortgage in Principle last?
A Mortgage in Principle typically lasts between 30 and 90 days, depending on the lender. The expiry date will be shown on your certificate.
When should you get a Mortgage in Principle?
Get a Mortgage in Principle before you start looking at houses.
It helps you understand your borrowing potential and narrows down your price range. It also shows estate agents and sellers that you’re serious about buying, making you more attractive as a buyer.
Why The Mortgage Store Chorley?
Exclusive rates you won’t get directly from lenders
A dedicated point of contact from initial enquiry right through to completion and beyond
Appointments seven days a week, to best suit your schedule
Ongoing rate monitoring until completion as standard
Do you have a question?
Can you be turned down for a Mortgage in Principle?
Yes, you can be declined for a Mortgage in Principle.
This usually happens if the loan amount is unaffordable, you don’t meet the lender’s criteria, or you haven’t passed the credit score.
What credit score do you need for a Mortgage in Principle?
There isn’t a specific score that guarantees you’ll be accepted.
The reasons behind your score matter more than the score itself. For example, a low score could be due to missed payments or lack of borrowing history. Lenders view each of these differently.
Can you get a Mortgage in Principle with bad credit?
Yes, you can get a Mortgage in Principle with bad credit, but it can be more challenging.
The impact of bad credit depends on what the issues are and how recently they occurred. Older issues may matter less if you have built up good credit since then.
Minor issues, like a small missed payment on a phone contract, might not matter as much as major ones, like a large County Court Judgment.
Some bad credit issues, like active bankruptcy, make it impossible to get approved.
Is my mortgage likely to be approved after passing the initial credit check?
A Mortgage in Principle is not a guarantee that your full mortgage application will be approved, but it’s a positive first step.
The lender will still need to verify your information, for example by requesting payslips to confirm your salary. They also need to do a basic valuation of the property. If the property isn’t suitable security or new information arises during the full credit check, your application could be declined.
Additionally, any changes in your circumstances between the Mortgage in Principle and full application need to be disclosed.
Unsure if you can get a mortgage?
Contact us now for a no-obligation chat.
Can you book a house viewing without a Mortgage in Principle?
There’s no hard and fast rule that says you have to have one, but some estate agents won’t let you book a viewing without a Mortgage in Principle.
Having the certificate proves your intent, and shows that you have the means and ability to proceed with a purchase. In other words, it tells them you aren’t a timewaster!
Can you put an offer in on a house without a Mortgage in Principle?
Yes, but we wouldn’t recommend it. It’s best to get a Mortgage in Principle first. That way, you won’t fall in love with a house you can’t actually buy.
What’s more, sellers are more likely to take your offer seriously if you can prove that you can follow through with it. This is especially important if there is a lot of interest in the property and you are competing with others. You need to make yourself as attractive a buyer as possible, and having a Mortgage in Principle certainly helps.
What do you need for a Mortgage in Principle?
Lenders usually don’t need documents at this stage. However, you must give them accurate information about your income and expenses. When you submit a full application, the lender will likely ask for proof of the details you provided.
If you’re using a broker, we often ask for documents before getting you a Mortgage in Principle. We do this to verify your information, ensure we give the right details to the lender, and inform you of any potential issues. Common problems include old addresses on documents and expired passports.
What happens after getting a Mortgage in Principle?
View houses
This is the fun bit - now you know what your borrowing potential is, and what the repayments might look like, go and view properties you're interested in!
Have an offer accepted
Once you've found The One, put an offer in. We can help you with this if you're unsure. Keep your fingers crossed for it being accepted!
Let us know
When the seller says yes, pick up the phone and tell us so we can share in the excitement. We'll tell you what you need to do next.
We'll handle the rest
We'll take care of the mortgage and protection paperwork, and we'll work with everybody else to make sure everything goes as smoothly as possible.
How can The Mortgage Store Chorley help with a Mortgage in Principle?
At The Mortgage Store Chorley, we understand that getting a Mortgage in Principle can be challenging.
Lots of people struggle with finding the right lender, confusing requirements, and simply finding the time to get things sorted. We provide clear guidance on the necessary documents, help you navigate through the financial checks, and work efficiently to get your Mortgage in Principle approved quickly. With our expert support, you can move forward with confidence in your home-buying journey.
YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE
