What is a Mortgage in Principle?

Carl Atkinson

4-minute read

Last updated: 9th June 2020

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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.

Does a Mortgage in Principle affect credit ratings?

To get a Mortgage in Principle (sometimes called an Agreement in Principle or a Decision 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:

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.

Almost all lenders (and Mojo) use a soft credit check to assess whether they can provide you with an Mortgage in Principle, which doesn’t leave a record on your credit report. If a lender is going to use a hard credit check, they’ll tell you first.

How reliable is a Mortgage in Principle?

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 and they are a good first step to knowing that you could get a mortgage.

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. Use the online mortgage broker Mojo Mortgages to get yours.

Mortgage in Principle example

Mortgage in Principle example

You can check if you're eligible for a mortgage and download your Mortgage in Principle in 10 minutes

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Is the Mojo document the same as you get from a bank?

There's only one difference.

Both tell you how much you can roughly afford to borrow and both show that you have no major credit or financial issues that would prevent you getting a mortgage.

Equally both can be used to help you make an offer on a house.

The major difference is that when you get a Mortgage in Principle from a lender, you're embarking on their mortgage application process. You will need to submit documents to the lender and they will run their own credit check.

Download mortgage in principle

After answering a few questions online with Mojo, you can see your best offers from over 90 lenders and download a Mortgage in Principle.

If you choose Mojo as your broker, we can help you through this process and check all your paper work is correct before we submit it.

How do I get an Agreement in Principle (AIP) or Decision in Principle (DIP) from a lender?

A lender uses info from a credit check to decide whether they’re able to offer you an Agreement in Principle. Most use a soft search, but some still use a hard search

They'll also look at your current financial circumstance to decide just how much they are willing to lend you.

What do I need to get an Agreement in Principle?

Not much. This will do for most providers and they get most of it from the credit search:

  • Name and other personal info, such as DOB
  • Address history for the past 3 years
  • Your income
  • An overview of your monthly outgoings and credit commitments

It may take a long phone call to provide this info, but once you do you can get an Agreement in Principle in a few minutes.

Again, if you want to use Mojo's free broker service we can submit these documents for you.

How long does an Agreement in Principle last?

Normally they last 90 days.

What stops you getting an Agreement in Principle?

There are a few reasons why a lender might decide they can’t offer you an AIP:

Being declined by one lender doesn’t mean you’ll be declined by all lenders, but it’s worth speaking to a broker to find out who’s most likely to be able to offer you an AIP (and a mortgage, once your offer has been accepted).

Here are a few other articles you may find useful.

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What will happen when I speak to a mortgage adviser?

There's nothing stressful about a mortgage adviser meeting, but if you want to be prepared, find out what will happen first, here.

See the mortgage adviser questions... and know how to answer them

Need a Mortgage in Principle, like, right now?

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