There are various reasons why you should consider getting a mortgage agreement in principle, or sometimes referred to as a decision in principle.
Reassurance: you know that you can afford the intended mortgage and are in a financial position of being able to proceed.
Property Viewings: in the current climate, estate agents and vendors are only likely to make a viewing with people who are in a position to proceed. Having a mortgage agreement or certificate demonstrates that you can.
Credibility: when viewing houses and find your perfect home, having an agreement in principle gives your offer credibility. Sellers are likely to take you seriously knowing that you have a mortgage already approved in principle.
Speed: it helps the mortgage process and prevents unnecessary delays. You should have been advised what supporting documents are required and therefore have time to collate them in advance of submitting a mortgage application.
How do I get a mortgage in principle?
Your advisor will ask you to provide your full name, date of birth, three years address history, income details, and information relating to any financial credit agreements and expenditure.
It is important to know that when applying for a mortgage in principle, many lenders will carry out a credit search. This may be a soft or hard footprint and could be visible on credit-bureau data. Do not have many hard credit checks as this can have an adverse effect on your overall credit score.
What if a lender declines my application?
It is important to try and identify the reason why;
- poor credit history or credit profile
- not on the electoral register
- too high debt to income ratio
- multiple addresses and cannot be located
- don’t meet the lenders’ criteria
If you receive a negative response or decline decision, you may need to make some changes, check your credit report, or approach a lender more suited to your circumstances.
How long does an agreement in principle last?
This can vary significantly between lenders. Usually, a mortgage agreement in principle is valid for 30 days.
Should it expire, you can reapply but try not to request too many. Instead, apply for one when it is the most appropriate time.
We’re here to help
If you are unsure whether to apply for an agreement in principle or don’t know who to approach, let us help you. We can discuss your circumstances and give you the appropriate advice. Contact us or call our team on 01780 480600.
