Get a Mortgage in Principle
A mortgage in principle shows roughly how much a lender may be willing to lend you, before you make a full mortgage application.
SBS Finance arranges your mortgage in principle as part of our mortgage advice, in English or Polish. We do not charge for an Agreement in Principle, and we help you choose a lender whose criteria suit your situation before anything is submitted.
What is a mortgage in principle?
A mortgage in principle (MIP) is a statement from a lender saying how much it may be prepared to lend you, based on the information you give about your income, outgoings, credit history and deposit. You may also see it called an agreement in principle (AIP) or a decision in principle (DIP). They all mean the same thing.
It is not a mortgage offer and it does not guarantee that you will be lent the money. When you find a property, the lender still checks your documents, carries out its full affordability and credit checks, and values the property before it decides whether to make a formal offer.
Why get one before you house-hunt?
- You get a realistic idea of your budget before you start viewing properties.
- Many estate agents and sellers ask to see one before they accept an offer.
- It can bring credit file or affordability issues to light early, while there is time to deal with them.
- Your adviser already has most of the information needed for the full application.
How SBS Finance helps with your mortgage in principle
Lenders look at applications in different ways. Applying in several places at once can leave a trail of searches on your credit file, and a decline from the wrong lender does not help anyone. We review your circumstances first and only then approach a lender that is likely to fit.
That matters most if your situation is less straightforward, for example if you are a first-time buyer, self-employed, moving home or have had credit problems in the past. You can also use our affordability calculator to get a rough figure before we speak.
How it works, step by step
Free initial consultation
We talk through your plans, income, outgoings, deposit and credit history, in English or Polish. This helps us understand which lenders are likely to suit you before anything is submitted.
Gather your details
We let you know which details and documents to have ready, so the information given to the lender is accurate and matches what you will later prove in a full application.
We choose a lender and apply
We pick a lender whose criteria fit your circumstances and submit the mortgage in principle on your behalf. We tell you beforehand whether the lender uses a soft or a hard credit search.
You receive the decision
If the lender agrees in principle, you usually receive a certificate you can show to estate agents and sellers. If it declines, we explain the likely reasons and the options available to you.
Find a property and apply in full
Once your offer on a property is accepted, we move on to the full mortgage application, the lender’s valuation and the mortgage offer, keeping you updated along the way.
Documents you may need
Lenders vary, but these are the details and documents usually asked for:
- Photo ID, such as a passport or driving licence
- Your address history for the last three years
- Recent payslips and your latest P60 if you are employed
- SA302s and tax year overviews, or accounts, if you are self-employed
- Recent bank statements showing your income and regular outgoings
- Details of loans, credit cards, car finance and other commitments
- Proof of your deposit, plus a gifted deposit letter if a family member is helping
Soft or hard credit check?
Many lenders use a soft search for a mortgage in principle. Other lenders cannot see it and it does not affect your credit score. Some lenders use a hard search instead, which is recorded on your credit file.
Several hard searches in a short time can affect how lenders view you, so we tell you which type the lender uses before we apply. The full mortgage application will normally involve a hard search.
How long does it last?
A mortgage in principle typically lasts between 30 and 90 days, depending on the lender. If it runs out before you find a property, it can usually be renewed or a new one requested.
Let us know if your income, job or commitments change in the meantime, as the lender’s decision is based on the information given at the time.
Mortgage in principle: frequently asked questions
Fees
There may be a fee for arranging a mortgage. The precise amount will depend on your circumstances, e.g. credit history and employment record. It will typically be £395 for purchases, £199 for remortgages and £495 for Buy to Let. We do not charge for a product transfer or an Agreement in Principle. We will confirm your fee in writing before any chargeable activity.
Ready to get your mortgage in principle?
Book a free initial consultation with an SBS Finance adviser, in English or Polish. We will check your situation, explain your options and arrange your mortgage in principle with a suitable lender.
Phone
03456 461 941Address
Unit 314, Solent Business Centre, 343 Millbrook Road West, Southampton, Hampshire, United Kingdom. SO15 0HWSee the regulatory information in the website footer.