A Mortgage in Principle is a certificate that says, in principle, how much money a lender is happy to loan you to buy a house.
When you’re ready to make an offer on a property, a Mortgage in Principle will show you’re serious and in a position to buy.
Credit where it’s due
To get a Mortgage in Principle (sometimes called an Agreement in Principle), you’ll have to answer some basic questions about yourself and pass a credit check.
The questions and credit check are designed to see if: 1) you can afford to repay the loan and 2) how well you’ve handled debt in the past.
Depending on the lender, you’ll either get a hard or soft credit check. A soft credit check is recorded on your credit history, but if you’re rejected for the loan your credit score won’t be harmed.
If your application is rejected after a hard credit check, your credit score may suffer – particularly if you get a series of these rejections in a short space of time.
Even if you pass both, a Mortgage in Principle is not a mortgage, or even a guarantee that you’ll get one. It’s just an indication of what you could be eligible for based on a basic assessment.
Nevertheless, they’re useful if you’re house-hunting.
A Mortgage in Principle is valid for around 90 days. A lot of things can change in the mortgage market in that time, so if your Mortgage in Principle expires you’ll want to get a fresh one to make sure you’re in the best possible position.
You can get a Mortgage in Principle with help from Mojo Mortgages in just 15 minutes, all from your laptop or phone and all for free. Click here to get yours.