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How to get a Mortgage in Principle and learn how they help you get onto the property ladder
What is a Mortgage in Principle (MIP)?
A MIP (sometimes referred to as an Agreement in Principle, AIP, Decision in Principle or DIP) is a certificate or statement that can be issued by either a lender or broker (such as Trussle), usually before a full mortgage application has been made.
The document will declare that, ‘in principle’ they would be willing to lend you a certain amount of money to buy a property.
If you choose to go directly to a lender, the information you provide will allow the lender to check your credit file, helping them to establish whether you’re mortgageable and if they’re happy to lend you the requested amount.
The document will show an estate agent that you’ll be able to obtain a mortgage and meet the required monthly repayments, on top of your deposit. By showing that you’re a serious buyer, you’ll be in a better position to make an offer which is more likely to be accepted and stand out from other prospective buyers who don’t have a MIP.
How reliable is a Mortgage in Principle?
An AIP/MIP is not a guarantee that you’ll be able to borrow that amount. You’ll have to go through the full application process and have your earnings and credit history examined by the lender before you can get a mortgage.
However, it’s still a good indicator of what you could borrow, and looks favourable if you wish to put in an offer on a house.
How to get a Mortgage in Principle
1. Where to get a Mortgage in Principle
You can secure a MIP either directly from a mortgage lender or from a broker. Trussle’s free online Mortgage in Principle service can help you get a MIP in minutes.
A broker’s MIP is based solely on information disclosed by the customer, and would still be subject to lender criteria and credit score checks.
You can choose to go directly to a lender, though keep in mind that they may conduct a hard credit check - some do while others opt for soft checks instead. However, banks are increasingly moving to soft checks for MIP, and usually only carry out a hard check when the full mortgage application is submitted.
At Trussle we won’t credit check at the MIP stage.
2. What you need when applying for a Mortgage in Principle
When applying for a MIP you won’t have to submit as much paperwork or information as a proper mortgage application, but you will be asked for*:
three years of accounts if you’re self-employed
three months' worth of utility bills as proof of your current address
form of photo ID, such as a passport or driving licence
*This isn’t required for Trussles’s MIP process.
3. Once you get your Mortgage in Principle
Once you have the MIP you can use it to make an offer on a home. Should the offer be accepted, then you can go ahead and make a full mortgage application with your chosen lender or broker.
How long does a Mortgage in Principle last?
When you get your MIP from a lender, you usually have about three months before your MIP expires (between 30 and 90 days).
If it takes longer than planned to find the home you want to buy, or you find that there are newer, more competitive mortgage deals on the market since you arranged the MIP, then you can re-apply. However, if the lender you apply with is carrying out hard credit checks, you should be cautious about doing this too many times, as it could damage your credit score.
Can I get a Mortgage in Principle from Trussle?
We’ve made getting a Mortgage in Principle free and painless. It only takes five minutes to answer our questions and receive your MIP, which you can then print or download to instantly start your property search.
What questions will I be asked?
We need to know a few things about you so we can work out how much lenders would be willing to lend to you.
As mentioned above, this includes your:
Don’t worry if you don’t have all your information to hand. We’ll save your profile so you can come back to it when you’re ready.
Will I go through a credit check when getting a Mortgage in Principle?
Not for a Mortgage in Principle.
If you get a MIP, and then later ask us to recommend a specific mortgage deal, we do what’s known as a soft credit check. This involves checking the information you give us with Experian, the credit reporting company.
The process tells us whether you’ve got any outstanding debts and how well you've managed these commitments, for instance. Once we know the full picture we’ll search thousands of deals to find the right mortgage for your circumstances.
The benefit of a soft credit check is that it doesn’t affect your credit score.
Do I need a credit report to get a Mortgage in Principle?
Not usually, but you might need one if you’ve got a history of bad credit. We’ll let you know if we need to see your credit report once you’ve answered the questions.
What happens next?
If everything looks good, we’ll work out how much you could afford to borrow. You can then download your report immediately, and we’ll also email you your Mortgage in Principle straight away.
Once you’ve had an offer accepted on a new home, you can add the property’s details to your profile so we can start finding the right mortgage for you.
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Your home could be repossessed if you don't keep up repayments on your mortgage.
You may have to pay an early repayment charge to your existing lender if you remortgage.
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