What Is a Mortgage in Principle?

Buying your first home can feel like navigating a maze, but getting a Mortgage in Principle (MIP) is one of the first steps that can make the journey smoother. A Mortgage in Principle is a statement from a lender indicating how much they’re willing to lend you based on a preliminary assessment of your finances. Here’s why it’s essential and how to secure one.

Think of a Mortgage in Principle as a ‘green light’ for your home-buying journey. It’s not a formal mortgage offer, but it gives you and sellers confidence that a lender is likely to approve your application. An MIP typically includes:

• The amount you could borrow.
• Confirmation that you meet the lender’s basic credit criteria.

It’s a quick and informal process, requiring minimal paperwork and no commitment from you or the lender.

Why Do You Need One?

Getting an MIP early in your home-buying journey has several benefits:

Credit Check Insight: MIPs involve a ‘soft’ credit check, giving you an early sense of how lenders view your financial profile without impacting your credit score. A soft search is the same when you do a car insurance quote or apply for a bank account.

Confidence While House Hunting: Knowing how much you can borrow helps you focus on properties within your budget, saving time and avoiding disappointment.

Stronger Offers: Sellers and estate agents take you more seriously when you can show you’re financially prepared.

Faster Mortgage Application: Having an MIP streamlines the next steps when you’re ready to proceed with a full application.

How to Get a Mortgage in Principle

Getting an MIP is simpler than you might think. At Turtle Mortgages, we guide you through the process in just a few steps:

Provide Basic Information: You’ll need to share details about your income, expenses, and deposit amount plus some documents. This helps us estimate your borrowing capacity. To find out what documents you will need to provide, read our blog under mortgages explained.

Credit Check: Depending on the lender, an MIP may involve a soft or hard credit check. Don’t worry—we’ll discuss this with you beforehand.

Receive Your MIP: Once approved, you’ll receive a document outlining the loan amount you could qualify for. This usually takes just a few days.

What an MIP Isn’t

While a Mortgage in Principle (MIP) is a valuable tool when starting your home buying journey, it’s important to understand its limitations. An MIP is not a guarantee of mortgage approval, as lenders will still carry out full affordability and credit checks during the application process. In addition, most Mortgage in Principle agreements are only valid for 30 to 90 days, meaning you’ll need to be mindful of the timeframe when viewing properties and making offers.

When Should You Get an MIP?

The best time to secure a Mortgage in Principle is before you start viewing properties. This ensures you’re financially prepared and ready to make an offer when you find the right home.