A mortgage in principle is an initial mortgage offer made by a lender to a borrower. The offer is conditional upon checks and other criteria (including an acceptable mortgage valuation) but it has several benefits for the borrower.
Why should I get a Mortgage in Principle?
If you possess a mortgage in principle you have a big advantage over another buyer that does not - all things being equal. Why? Because if you have a mortgage offer in principle you are effectively saying to any seller (and their agent) “I have the money!” And that is a big factor when a seller is choosing between offers. After all, before contract anyone can say anything. It may not be moral, but it’s unlikely to be legally binding or even unlawful to lie about your financial circumstances.
If you are able to prove that you hold a formal mortgage offer in principle then you are in a strong position to perform quickly.
How do I get a Mortgage in Principle?
The starting point is to decide who you are going to for your mortgage. This is where an experienced and qualified Mortgage Advisor will become invaluable. There are hundreds of different mortgage products and lenders out there at any one time. Some are better than others and many will be entirely unsuitable for your own personal circumstances. Choosing the wrong lender or mortgage product can cost you thousands!
Once you have decided on who is best for your lender, you need to apply for a mortgage. In order for a lender to issue you with a formal mortgage offer in principle, they’ll need a lot of information. At this stage they won’t necessarily need proof of things like income and monthly expenses but they will need this proof before you receive the money and if you can’t provide it later you will lose your mortgage offer. Therefore, liaise with your advisor sooner rather than later and make sure you provide accurate and up-to-date information.
If you are self-employed you’re going to need to prove your personal income and this is going to mean consulting with the taxman and/or your accountant. Do this before you start the process. It will delay things if you don't.
When should I apply for a Mortgage in Principle?
Mortgage offers in principle usually have a time frame and they usually expire after, say 3 or 6 months. It’s therefore important that you apply at the right time.
This can be tricky as when is ‘the right time’? If you are confident that you will find your dream home within a couple of months then it’s probably best to apply as soon as you start looking. This has two major benefits, namely;
- If you find your dream home in the first two weeks you will be well on your way to getting your mortgage offer and
- applying early will confirm how much money you can borrow and on what terms, making affordability clear and also setting a top level on your buying power. Why waste time looking at property that is miles above what you can realistically afford?
Who should advise me on the mortgage application process?
If you require a mortgage who better to speak with than Mortgage Required? We’re hugely experienced in this sector and our advisors have access to the whole mortgage market meaning that we can quickly discount unsuitable or unnecessarily expensive loans before making our recommendation. Then, we’ll help guide you through the application process, deal with all the paperwork and liaise with your solicitor and other advisors right up to completion.
Related articles:
Download our Free First Time Buyers Guide
Recent posts
Best UK Mortgage Rates this Week
4 days ago
Here are the lowest fixed mortgage rates of the week, available to first-time buyers, home movers, buy-to-let, and those remortgaging.
Call us for more information: 01628 507477 or email: team@mortgagerequired.com.
Stamp Duty Rush as Deadline Looms
5 days ago
According to Rightmove, a whopping 500,000 UK homebuyers are rushing to finalise their home purchase before the new Stamp Duty rules change in April.
The UK government is introducing new rules for Energy Performance Certificates (EPCs) that will impact landlords. Here's a summary of the key changes
Should I buy or rent in 2025?
12 days ago
Choosing to buy a house is one of the biggest decisions you are likely to make in your lifetime. There are many factors that influence a house purchase, these include: finances, housing market conditions, and mortgage rates.
ISAs: what are they, and which one is for me
15 days ago
Since being launched back in 1999 Individual Saving Accounts (ISAs) have been very popular for those wanting to put money into savings. There are four types of ISA, and the majority allow flexible saving and the ability to withdraw funds easily. There are financial penalties on certain products, these usually pay the most interest.
Benefits of buying a new build home
22 days ago
According to the Office for National Statistics, last year (ending March 2024), there were 153,800 new homes completed in the UK. To help the housing crisis, the UK government has pledged to build 1.5 million new homes in the next five years.
Check out some of the reasons why a new-build home might be for you.
Many households are still being affected by the high cost of living, with several people worrying about how they can make ends meet on a monthly-basis. Unfortunately, the cost of bills including, water, council tax, and energy are still rising. Here are some things you can do.
The Renters’ Rights Bill represents a significant milestone designed to enhance the rights and protections of tenants in the rental market. This comprehensive bill aims to foster a more balanced and fair rental sector, ensuring that tenants can enjoy greater security and equitable treatment. It is likely to become law in late 2025.
More information
Trusted by
