Having a mortgage in principle is not mandatory, but there are several good reasons to make one. Changes to your income can also make a difference. If you haven`t had pay slips verifying your income yet, it can be difficult to prove it. It`s important that you know the most important facts in advance – the level of checks a lender will do means that any information you accidentally omit or « optimize » will be discovered anyway, and if that means you suddenly don`t meet the criteria, your application may well be rejected. There will usually be no fees from a lender or broker for a mortgage in principle. Usually, a mortgage broker doesn`t charge until your mortgage business is secure (and sometimes not even then – learn more about how mortgage brokers charge). If you turned down a mortgage because the lender didn`t think you could afford the repayments, see what you can do to distribute your money more, either by increasing the amount you earn each month or by reducing your cost of living. You can also try to reduce the amount you need to borrow by increasing your deposit – for example, you can plan how to save more or use one of the government`s purchase assistance programs such as condominiums, equity loans, or ISA. You`ll need all of this for your full mortgage application anyway, so you can consider this a dress rehearsal. This should go without saying: make sure that all the information is correct, otherwise you may face rejection. There is no guarantee that the lender will definitely accept a mortgage application from you. Instead, it gives you an idea of your affordability and it`s just an important step in finally getting a mortgage.

Getting your mortgage agreed in principle (also known as a policy decision or AIP) is an important step in finally entering a new home, but the relief from obtaining an AIP can only be short-lived if you are then rejected when applying for an actual mortgage. This is the sad reality for a number of people who get a basic agreement: they find the perfect home, go with a full application and. fall at the last obstacle. In principle, agreements are primarily designed to assess whether you can afford the amount you want to borrow, based on a credit multiplier applied to your income. This also takes into account your expenses, as well as the lender`s individual criteria (the type of « risk profile » they are satisfied with, the duration of the mortgage, etc.). Also, many real estate agents (or sellers) won`t even consider taking a home off the market if you don`t have a PAI, as this means they have no idea if you`re even considered by a mortgage lender for the amount of money you want to borrow. A mortgage AIP usually takes up to 90 days and can help speed up the process of applying for a formal mortgage, as a lender can use the AIP to complete your application. .