How to get approved for your mortgage with a lender decision in principle:
What is a lender decision in principle?
A lender decision in principle tells you if the mortgage lender is willing to give you a mortgage based on the information supplied to your mortgage broker, It is important to make sure the information you supply to your broker is as accurate as possible. Your broker will present this information to the lender for them to make an initial decision based on your situation and circumstances.
Does this involve a credit check?
Yes, to obtain an accurate decision the lender will need to perform a credit check or search on you.
Will this impact my credit score?
Most lenders only carry out a soft search at this stage so this will not have any impact on your score. Only a lender leaving a hard search print will possibly impact your credit score. Your mortgage broker will discuss this with you before obtaining your decision in principle.
Why do I need a decision in principle?
If you are looking to purchase or remortgage a property it is important that you know exactly what is available to you and if the lender is prepared to give you a mortgage. The only way to find out is to ask for a decision in principle.
Will a decision in principle help me to negotiate with estate agents?
Yes, if you are viewing and searching from property then you should have this with you so that you are prepared and able to negotiate your purchase price. This is all part of the homebuyer process and getting ‘mortgage ready’.
What do mortgage lenders check and what do they look for?
At this stage lenders are mostly checking your credit file. They look for current debts such as loans and credit cards to check affordability. They also look at your payment history and check your identity and address history. Some lenders will calculate a credit score based on your credit file. Every lender has it’s own unique way of calculating your credit score so whilst you may score low with one lender you may score high with another. Your mortgage broker will explain this to you.
What if I am declined by a lender?
Don’t worry if this happens to you, it can be for a number of reasons. This is exactly what a good mortgage broker is trained to help you with. If you are declined at decision in principle stage your mortgage broker will work with you to find an alternative lender.
What if I have bad credit, missed payments or just a low credit score?
Your mortgage broker has access to the full market and will work with you to find a lender that will give you a mortgage. Some niche lenders specialise in adverse credit whilst other lender take a more human, common sense approach to lending. If you think that you may have some adverse credit on your file make sure your mortgage broker is aware of this so that we can find you a successful solution.
How can I check my credit file?
You can obtain your own credit file and share this with our mortgage broker. This will give your mortgage broker full visibility of your situation and will help us to find you the best possible mortgage deal available to you. Your mortgage broker will be able to show you how to obtain your credit file.
Does a decision in principle guarantee me a mortgage?
No, it just means that the lender has carried out some checks and based on this they are willing to give you a mortgage. Nothing is certain until you apply, your documents are fully assessed by the lender and the property is valued. At this stage this is as much certainty that you can get without applying for a mortgage.
What if my mortgage goes wrong?
Not many mortgages go wrong after decision in principle stage but it can happen. If your mortgage is declined by the lender then your mortgage broker will react quickly by placing you with an alternative lender. This is one of the many benefits of using a good mortgage broker.
How do I get a decision in principle?
Simply start here and your broker will arrange this for you: