Mortgages in Principle & Mortgage Offers

Before you start your property search, it may help to have a clear idea of how big a mortgage you’ll be able to get.

Getting a mortgage in principle should give you a good indication of how much you might be able to borrow before you submit a full mortgage application and receive a formal mortgage offer.

Here, we explain the difference between a mortgage decision in principle and a mortgage offer.


What is a mortgage decision in principle?

When a mortgage lender gives you a ‘decision in principle’ or ‘agreement in principle’, they are basically saying how much ‘in principle’ they are prepared to lend you.

This can help you look for properties in your price range and provide sellers with confidence that you are ready to buy. To offer you a mortgage in principle, lenders will need some basic details about you, such as your income and how much you want to borrow. They will then usually contact a credit reference agency to conduct a credit search on you.

If your credit score is up to scratch, you’ll be given a certificate indicating how much a lender might be prepared to offer you. 

Remember though, that a mortgage in principle is not a guarantee that you will definitely be offered a mortgage, as a lender may change their decision or offer you different terms once they have received your full application and carried out their underwriting checks.


How long does a mortgage in principle last?

A mortgage in principle will typically last between 60 and 90 days.

If it expires before you need it, you can always re-apply, but be careful about requesting too many agreements in principle as lots of credit searches could damage your credit score.


What is a mortgage offer?

A mortgage offer is official confirmation from a lender that it will provide you with a mortgage.

You will only be given a mortgage offer once you have gone through the mortgage application process, and provided the lender with all the information they require to carry out their underwriting checks. They will also want a valuation report for the property you want to buy before they will issue a formal mortgage offer.


How long does it take to get a mortgage offer?

The length of time it will take to get a mortgage offer depends on which lender you choose, how long it takes you to provide them with the information they need, and how straightforward the purchase is.

Delays often happen when lenders are waiting for more information from you, so having all the relevant paperwork to hand can help speed the process along.

If all goes smoothly, you will typically receive your mortgage offer within around 4 weeks of applying.

Due to the volume of business L & C place with mortgage lenders we constantly monitor their service levels, and the time it takes them to produce mortgage offers. If you require a mortgage offer by a certain date, i.e. to secure a new purchase, we can advise which lenders should meet this deadline and which might struggle - due to backlogs, availability of their valuers, etc.


How long does a mortgage offer last?

Most mortgage offers will last between 3-6 months, but this can vary from lender to lender.

For example, some lenders' mortgage offers will only be valid for three months from the date the offer was first made. Other lenders, however, will start the clock ticking from the point you make your application, while some have specific completion deadlines in place.

Bear in mind that lenders take different approaches to how far in advance they will give you a mortgage offer, so make sure you're clear on exactly when any deal can start before you apply.

If you anticipate a delay in activating your offer, and are taking a fixed rate, consider a product that runs for a set number of years, i.e. 2 years rather than until a fixed end date, e.g:. 31.08.20. This way you will still benefit from the full 2 years on the product. 

If you are purchasing a new build property, some lenders will consider extending the offer by a further 3/6 months. Talk to our mortgage advisers now for fee-free advice.

You can find out more about how long it takes to get a mortgage here.
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