How Long to Get a Mortgage in Principle UK?

How long does it take to get a mortgage in principle? Getting a mortgage in principle, is a crucial stepping stone to buying a new property and can help you confidently begin your property search. A mortgage in principle, is a conditional offer from a lender stating how much you can borrow. It’s not a guaranteed mortgage, but it is a valuable tool in the first stages of your property search. While not compulsory, getting one in place before you find a property and apply for your mortgage later is highly recommended. This article examines the process of getting a mortgage in principle and how long it takes. 

What is a mortgage in principle?

A lender will often provide a certificate of mortgage or agreement in principle as a document that you can provide to an estate agent or seller to show that you can afford to buy a property. A lender does a preliminary assessment of your financial situation and lets you know how much you can borrow. A mortgage in principle (MIP) helps demonstrate that you are a serious buyer, and some estate agents request you have this in place before viewing a property. A mortgage in principle is sometimes referred to as a decision in principle by lenders. A mortgage in principle, differs from using a mortgage calculator. A calculator can help you calculate affordability but doesn’t provide a personalised offer in principle.

How long does it take to get a mortgage in principle, and how long does it last?

Obtaining a mortgage in principle, can take just a few minutes. Depending on the lender - a mortgage in principle can be provided quickly - some lenders with a fully automated process can provide a mortgage in principle in under 15 minutes. The process can take longer if your paperwork is not in place beforehand. Using electronic signature platforms like Docusign eSignature and providing ID verification remotely can increase the speed of the entire process.

Most lenders offer a mortgage in principle that is valid for a flexible period, somewhere between 30 and 90 days, so you’ll have this time to research properties, find your dream home and apply for a mortgage. The certificate can often be extended if required. 

What are the benefits and limitations of obtaining a mortgage in principle?

A mortgage in principle, can be beneficial as it clarifies how much money can be borrowed from the lender, which allows a buyer to set a realistic budget for buying a property. It also demonstrates to estate agents and sellers that you have the ability to move forward with the sale. One limitation of a mortgage in principle, is that it’s not a complete mortgage offer, and lenders could change their offer after a full financial assessment. 

What information is needed to apply for a mortgage in principle?

Buyers should be prepared to provide all of their information at speed if they want to get a mortgage in principle, turned around quickly. As a buyer, you must provide basic personal information like your address and date of birth, but you should also be prepared to share financial information. The information required could include income, employment history, salary, and any debts you currently have. This may include:

• Payslips for the previous three or six months

• Photographic ID

• Bank Statements

• Your current loan or credit card debts

• An idea of the type and value of the property you want to purchase

How does a mortgage in principle, differ from a full mortgage offer?

While a mortgage in principle, gets you a step closer to getting a mortgage, it is not the same as a final offer you can use to buy a house. However - it does give sellers and estate agents a good indication of whether a home is affordable for you. It provides reassurance that your complete mortgage application will likely be accepted if your economic situation doesn’t change. A mortgage in principle, is just an indication that you can get an approved mortgage, but the process to obtain it doesn't include a strict financial assessment. A full mortgage assessment would consist of additional checks examining income, expenses, credit history, and a total valuation of the property to be purchased. When a mortgage offer is given, you can complete a property purchase.

Does applying for a mortgage in principle affect my credit score?

Lenders may perform either a soft or full credit check when you apply for a mortgage in principle. A full credit check will be recorded in your credit history, but a soft check won’t. You should be able to check with the lender which type of credit check they perform when you apply for a mortgage in principle to determine if it will be added to your record.

Can I apply for more than one mortgage in principle?

Whilst it’s possible to apply with several lenders, each check could affect your credit score if the lender is doing a full credit check. It’s best practice to research all lenders thoroughly and then apply for a mortgage best suited to your situation and from a lender likely to approve your application.

How can I improve my chances of getting a mortgage in principle?

A clear employment record and a stable income are key elements of being approved for a mortgage in principle, while reducing debts and avoiding taking on any new credit can also help.

What should I do if my mortgage in principle application is rejected?

Common reasons for rejection include insufficient income or a poor credit history. Ensure you have provided an accurate record of your income, and consider how you can improve your credit rating. Your credit rating could be improved by ensuring you make payments on time, reduce debt, and check that your details are recorded correctly on the electoral roll.

In conclusion, obtaining an MIP before finding your property is a positive first step, especially in a competitive property market where you may need to move quickly. Sellers often prefer that a buyer has a mortgage in principle in place.