What is a Mortgage in Principle?
When it comes to property hunting, there’s no better feeling than finding the house of your dreams. Especially as a first time buyer! However, before you can make an offer on a house, it’s best to have a Mortgage in Principle (MIP).
What is a Mortgage in Principle?
Also known as a ‘Decision in Principle’ (DIP), a Mortgage in Principle is a certificate or statement from a lender that confirms they would, ‘in principle’, lend a prospective borrower a certain amount of money based on the information provided.
A Mortgage in Principle can be submitted at any point during the house hunting process. However, most estate agents will encourage potential buyers to have a MIP prior to completing the process. This is because, a MIP will highlight your ability to afford to buy, which makes you look like a more attractive buyer. It will also provide added reassurance around your borrowing prospects.
It is worthwhile keeping in mind that Mortgages in Principle can impact your credit file for a long period of time. Therefore, it’s better to research your options and seek expert advice when looking for a mortgage to find the best option for you.
After all, Mortgages in Principle are not always guaranteed. Lenders may decide not to lend if your earnings or credit history look unfavourable. Even if you do have one, you may find that conditions of a MIP are only valid for a short period of time before rates or offers change.
Financial Foresight
Buying a property is potentially one of the most expensive investments in your life, which is why it’s vital to seek expert mortgage advice. Contact Financial Foresight today to get the best deal available to you.
Our expert advisors will be more than happy to offer trusted mortgage advice.
