What is a mortgage in principle?
As a first-time buyer, one of the best things you can do early on in your buying journey is to get a mortgage in principle. It gives you a realistic idea of what you can afford and shows us that you’re ready to move when the right property comes along.
Think of it as your first step toward turning house hunting into home owning.
What exactly is a mortgage in principle?
A mortgage in principle (sometimes called an agreement in principle or decision in principle) is a statement from a bank or building society estimating how much they could lend you.
It’s not a full mortgage offer, so nothing is guaranteed, but it does give you a realistic starting point for your budget. Sometimes you might discover that you can stretch a little further than you first thought, or you might need to adjust your expectations.
It also reassures us that you’re ready to move quickly if the right new home comes along. Most lenders recommend getting one as soon as you seriously start looking at properties.
How do you get a mortgage in principle?
Getting a mortgage in principle is usually quick and simple. You can often apply online, over the phone, or in branch with a bank or building society. Here’s what you can expect when you apply for a mortgage in principle.
First, you’ll need to decide whether to go through a mortgage broker or apply directly with a lender. Independent brokers search the market to find the best deal for you, while lenders like Nationwide, Barclays and Halifax are the ones who actually provide the mortgage.
Next, you’ll need to provide some basic financial information, like your income, regular outgoings, savings, and any debts. This helps the lender work out roughly how much you could afford. They’ll also perform a credit check. Some lenders run a soft check that won't affect your credit score, while others do a hard check that other lenders can see and could impact your credit if you have several checks in a short period.
If everything looks good, you’ll receive a certificate showing how much you might be able to borrow, this is often emailed straight away. The whole process can take as little as 15-30 minutes, and a mortgage in principle usually lasts between 60 and 90 days.
Mortgage in principle FAQs
Firstly, getting a mortgage in principle helps you understand your budget from the start, so you can focus on looking at homes that are actually in your price range and avoid the disappointment of falling in love with a property that’s more than you can afford.
It shows that you’re serious and have passed all affordability checks to purchase the home you’re interested in. Having a mortgage in principle means that once you’ve found your dream Gleeson home, you can make a full reservation and begin the exciting journey into homeownership.
A mortgage in principle is a helpful guide, but it’s not a guarantee. When you apply for a mortgage, the lender will check things in more detail, such as payslips, bank statements, and spending habits. The final mortgage offer could end up being the same, lower, or occasionally higher than your initial estimate.
Once you have found a home that is right for you, a Mortgage in Principle is required to proceed to full reservation on your new Gleeson home. Once you have this in place, our Sales Executive will confirm the reservation of your new home, and you will be able to instruct your solicitors.
Getting a mortgage in principle can affect your credit score, but it depends on the type of check the lender does. Remember to check with your lender to find out which type of check they’ll do.
- Soft check: Doesn’t affect your score and is only visible to you.
- Hard check: Can slightly lower your score if you have several in a short period, and other lenders can see it.
Ready to find your first home?
At Gleeson, we build modern, energy-efficient new build homes designed with first-time buyers in mind. With great locations and affordable prices, we make getting onto the property ladder easier.
Explore our range of new build developments today and take the first step towards unlocking the door to a home that’s truly yours.
Please note: Gleeson Homes is not regulated by the FCA and does not offer financial advice. We recommend you seek independent legal and financial advice.