Mortgage in principle
Apply for a Mortgage in Principle with Better.co.uk to take your first step onto the property ladder.
What is a mortgage in principle (MIP)?
A Mortgage in Principle (MIP), also known as an Agreement in Principle or Decision in Principle, is a document from a mortgage lender or broker indicating how much they will likely lend to you for a mortgage.
Before you begin house hunting, it’s essential to get a Mortgage in Principle because, combined with your deposit, it will set your budget for purchasing your new home.
When deciding how much to offer for a new home, remember to budget for additional costs associated with buying a house. It's crucial to consider these expenses in your financial plan.
Using your mortgage Decision in Principle as a guide, it's not wise to exhaust your budget entirely when making an offer. Keep in mind that the actual amount a lender may approve could differ from your Decision in Principle during the formal application process once the lender has looked into your finances more closely.
How do I get a Mortgage in Principle?
You can get a Mortgage in Principle directly from a lender or by using a mortgage broker like us.
Each lender has unique eligibility criteria, and the borrowing amount can vary between providers. Approaching a specific lender will give you an idea of their potential lending amount, but exploring other lenders with different criteria might lead to better offers.
When you apply for a Mortgage in Principle with Better.co.uk, we assess and compare borrowing options from a wide range of lenders, providing a more precise figure and improving your chances of securing a Mortgage in Principle.
To apply for a Mortgage in Principle with Better.co.uk, you’ll need to:
Live in the UK
Have the right to work and live in the UK
Be aged 18 or over
What information do you need for a Mortgage in Principle?
To determine the amount you could borrow, we'll ask for the following details:
Your current and most recent addresses
Your employment status
Your monthly expenses, including any existing credit commitments
Don’t worry if you don’t have all this information to hand; you can save your profile and come back to it later.
When you apply for a Mortgage in Principle, we'll perform a soft credit check to determine how likely different lenders are willing to accept a mortgage application from you and if there’s anything in your credit history that may impact how much you could borrow.
Once you’ve got a mortgage Agreement in Principle, you can speak to one of our expert mortgage brokers about the next steps and how you can improve your chances of getting a good mortgage deal.
Mortgage in Principle FAQs
While making an offer on a property without obtaining a Mortgage in Principle is possible, estate agents will often ask if you have one before presenting your offer to the seller.
If you have the funds to buy a property without a mortgage, you won’t need a Mortgage in Principle, provided you can explain where the money is coming from.
However, if you need a mortgage to afford a new home, having a Mortgage in Principle before you make an offer on a property will mean the seller and their estate agent will take the offer more seriously. Most estate agents won’t put an offer to the seller without proof of funds in place.
When buying a property with a mortgage, your Mortgage in Principle and your deposit are used as proof of funds. This demonstrates that providing nothing goes wrong during the application process; you’ll be able to afford the offer you’ve made.
A Mortgage in Principle, isn’t a guarantee that you’ll be accepted for a mortgage or that you’ll be able to borrow as much as it states.
Lenders will still need to check your earnings, outgoings and credit history once you apply for a mortgage.
The accuracy and reliability of your Mortgage in Principle, can vary based on its source. Those obtained directly from a lender generally indicate their willingness to lend, but it's not a definite commitment, and they may not honour it during the formal application process.
When you get an Agreement in Principle with Better.co.uk, we’ll check your credit history and eligibility with different lenders, giving you a more accurate idea of how much you’ll likely be able to borrow.
Our expert mortgage brokers can work with you throughout the mortgage application process to help you find the right mortgage.
When you apply for a mortgage with us, we’ll take a look at your credit history using a soft credit check. Soft searches won’t impact your credit score.
Be mindful when applying for your Mortgage in Principle that some lenders or brokers may conduct a hard credit check during the Mortgage in Principle application. Hard credit checks leave a record on your credit report, and multiple checks in a short time can lower your credit score.
If your Mortgage in Principle expires and you’ve applied for it with a lender that conducts hard credit checks, it’s wise not to reapply until you’re sure you need one. Multiple hard credit checks within six months can harm your credit score and reduce your chances of obtaining a mortgage.
A Mortgage in Principle (MIP) doesn’t guarantee the approval of your mortgage application; it only indicates the amount you could potentially borrow.
When you apply for a MIP with Better.co.uk, we’ll assess your eligibility with a wide range of lenders and let you know how much you could potentially borrow.
Our team of experienced mortgage brokers will help you throughout the application process and provide further guidance on improving your credit score and eligibility if required.
A Mortgage in Principle is a non-legally binding document designed to estimate how much you could borrow based on the information you've supplied, provided you meet the necessary eligibility criteria.
In contrast, a mortgage offer is a legally binding document issued by the lender after a successful mortgage application. It will also outline the terms and conditions of your new mortgage.
Before you receive a mortgage offer, the lender will thoroughly examine your financial history, which will involve a hard credit check. They will also check your affordability and that your property is worth the money you’ve offered.
You won’t need proof of deposit to apply for a Mortgage in Principle with Better.co.uk, although we’ll ask how much deposit you’ve got to put down to provide you with a figure.
You will need proof of your deposit when you make an offer on a property, so it’s important to ensure you have it ready by the time you make an offer on your chosen house.
Most MIPs are valid for between 30 and 90 days. A Mortgage in Principle from Better.co.uk will be valid for 90 days.
If you don’t find a property or make an offer before it expires, you can reapply; there’s no limit to how many times you can apply for a decision in principle with Better.co.uk.
If you’re applying for a Mortgage in Principle with a lender that runs hard credit checks, you’ll want to reduce the number of times you reapply because this could negatively impact your credit score.
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Important info & marketing claims
You may have to pay an early repayment charge to your existing lender if you remortgage. Your savings will depend on personal circumstances.
Your home may be repossessed if you do not keep up repayments on your mortgage.
*The savings figure of £420 is based on Better.co.uk remortgage customers in October 2023. Read more on our marketing claims page.
We can't always guarantee we will be able to help you with your mortgage application depending on your credit history and circumstances.
Average mortgage decision and approval times are based on Better.co.uk's historic data for lenders we submit applications to.
Tracker rates are identified after comparing over 12,000 mortgage products from over 100 mortgage lenders.
As of January 2023, Better.co.uk has access to over 100 lenders. This number is subject to change.
For buy-to-let landlords, there's no guarantee that it will be possible to arrange continuous letting of a property, nor that rental income will be sufficient to meet the cost of the mortgage.