MORTGAGE
AGREEMENT
IN PRINCIPLE

A Mortgage in Principle (also known as an Agreement in Principle or Decision in Principle) gives you an idea of how much you might be able to borrow before you submit your mortgage application.

Getting a Mortgage in Principle couldn’t be easier with L&C. Our online Mortgage Finder allows you to check your eligibility to see which deals you could qualify for, how much you may be able to borrow and how much it might cost. You’ll then receive an online ‘Decision in Principle’ certificate, which is our version of a Mortgage in Principle. Unlike many lenders our online Decision in Principle doesn’t require a credit check so it won’t harm your credit score.

Our expert advisers are on hand to talk you through any questions you might have, and to help you with your Mortgage in Principle so you’re ready to start your property search.

A Mortgage in Principle (sometimes referred to as a Mortgage Agreement in Principle, AIP or Decision in Principle) gives you an idea of whether you’ll qualify for a mortgage and how much you might be able to borrow before you submit your application.

When you get a mortgage approval in principle, a lender is essentially saying how much they’re willing to lend to you ‘in principle’. This can help you to narrow down properties in your price range, and it’ll also signal to sellers that you’re ready to buy. Estate agents will often ask if you have one, so it’s worth getting a mortgage in principle as soon as you’re ready to start house hunting. This is especially true if you’re buying a house in Scotland as although it’s not a legal requirement to put in a bid on a property, your offer won’t be taken seriously without a mortgage decision in principle.

Although an AIP mortgage is useful for understanding how much you’re able to borrow, it’s not the same as getting a mortgage offer, so it’s not a guarantee that you’ll get a mortgage. Only once you’ve applied for a mortgage and received an official mortgage offer can you be certain that the lender will provide you with a mortgage. This is because lenders may change their decision, or offer you different terms once they’ve carried out their full underwriting checks, for example checking payslips or having the property valued.

Mortgage Agreement in Principle Process

So, how to get a mortgage in principle? Our Mortgage Finder allows you to check your eligibility criteria and get a mortgage AIP online; you can also see which deals you could qualify for. We’ll need to know some basic details such as your income and how much you want to borrow, and then we’ll be able to offer you a mortgage in principle comparison so you’ll be able to see how much you could borrow and how much it might cost.

When you apply for a mortgage in principle, you’ll receive an online ‘L&C Decision in Principle’ certificate, which is our version of a mortgage in principle. Unlike many lenders, our online Decision in Principle doesn’t require a credit check so it won’t harm your credit score.

Once you receive a Mortgage in Principle certificate, it’ll typically be valid for up to 90 days. You can get another one if it expires before you find your dream home - but if you’ve approached a lender directly for a Mortgage in Principle, rather than through L&C, it’s likely that they’ll conduct a credit check each time you apply. Too many credit checks in a short period of time can affect your credit rating.

When you find a property you want to buy, you’ll need to submit a full mortgage application - and if you’re successful, you’ll then receive a formal mortgage offer, which is the official confirmation from your lender that they’ll provide you with a mortgage.

Mortgage Agreement in Principle Eligibility Criteria

Before you start your mortgage application in principle, you’ll need a few details about yourself and anyone else buying the property with you, including details of your income and monthly outgoings, your address history and personal details. Lenders are looking to understand whether you can afford the repayments on your mortgage both now and in the future should anything change. If you’re looking for a mortgage in principle as a first time buyer, you can maximise your chances by saving up as much as possible for your deposit. In general, the more deposit you have saved, the better rates you’ll get too.

You may also want to check your own credit report in advance to ensure that everything is in order. You can often do this for free for a trial period with one of the credit reference agencies like Experian and Equifax. If you notice any mistakes or discrepancies, be sure to have them corrected, as even seemingly small details could prevent you from getting a mortgage with the lender of your choice.

If you want to see what deals are open to you, use our online Mortgage Finder. This allows you to check your eligibility against a wide range of lenders’ criteria to see which deals you qualify for, how much you can borrow, and what it’ll cost.