Mortgage in Principle, or MIP for short, is also known as an Agreement in Principle, Decision in Principle, Mortgage Agreement in Principle, or a Mortgage Promise. A MIP is a personalised document confirming an amount of money, which a lender believes they would be able to lend you, based on the information you’ve shared at this stage. And even though it isn’t a legal requirement, increasingly agents will ask that you have one.

What is a Mortgage in Principle?

A Mortgage in Principle is specific to you and, together with your deposit, it can give you an indication of the property price range you can search within. So you can search for your new home with more confidence.

A MIP is normally valid for up to 90 days, but different lenders’ criteria and rules will differ.

What it isn’t

Why get a Mortgage in Principle?

Although MIPs aren’t essential, they’re increasingly very useful. Why?

Things to be aware of:

As part of getting a MIP, your lender or mortgage adviser will have to run a credit check. Don’t worry, they’ll ask for your consent first.

Most lenders use a ‘soft credit check’ for a MIP application, which isn’t recorded on your credit score. However, if the lender runs what’s known as a ‘hard check’, it will leave a footprint. And this could impact your credit rating if you apply for several within a short period of time.

So, it’s best to check with your chosen lender which approach they use.

How to get a Mortgage in Principle

As with a full mortgage offer, you can either apply through a mortgage broker, or direct with a lender.

What can impact a full mortgage application?

Since a MIP isn’t a guarantee that you’ll get a mortgage offer, it’s good to know what factors may impact the lender’s decision when it comes to the full application.