How Long Does a Mortgage in Principle Last?
If you’re planning to buy a home, you’ve likely come across the term mortgage in principle. Also known as a mortgage agreement in principle, agreement in principle, or mortgage decision in principle, it’s an essential early step in the home buying process. But how long does a mortgage in principle last, and what factors affect its validity?
In this guide, we’ll break down exactly how it works, how long it stays valid, and why it matters to estate agents, lenders, and your property search.
What Is a Mortgage in Principle?
A mortgage in principle is a statement from a mortgage lender that gives you an estimate of how much you might be able to borrow, based on your financial situation, income, and credit history. It isn’t a formal mortgage offer, nor is it legally binding, but it’s incredibly useful when house hunting.
Most estate agents will ask for a mortgage agreement in principle before letting you make an offer on a property. It shows you’re a serious buyer and gives sellers confidence that you can afford the property you’re viewing.
To issue one, most lenders will carry out a soft credit check. This means it won’t affect your credit score or show up on your credit file for other lenders to see. However, some providers might perform a hard credit search, so it’s always worth checking before you apply.
So How Long Does An Agreement in Principle Last?
So, how long does a mortgage in principle last? In most cases, an agreement in principle is valid for between 60 and 90 days. The exact timeframe can vary depending on the mortgage lender’s criteria and your personal circumstances.
Some mortgage providers offer shorter validity periods of around 30 days, while others may extend it to 120 days. Once your principle expires, you’ll need to request a new one before you can continue your property search or progress with a mortgage application.
What Factors Affect How Long a Decision in Principle Lasts?
Several factors can influence the validity period of your mortgage in principle:
- Lender’s criteria: Different mortgage lenders set their own expiry periods.
- Type of credit check: Some use a soft credit check (which won’t impact your credit rating), while others may carry out a hard credit search.
- Changes to your financial situation: New debts, changes in income, or applying for car finance or loans could affect your borrowing capacity.
- Interest rates: Shifts in market interest rates may lead most lenders to review your mortgage agreement in principle.
- Credit history updates: Missed payments or significant changes in your credit history could impact your borrowing power.
If any of these factors change after you’ve received your mortgage in principle, you may need to request an updated agreement before submitting a full mortgage application.
Can You Renew or Extend a Mortgage in Principle?
Yes — if your mortgage agreement in principle expires before you’ve found a property or submitted a full mortgage application, you can easily apply for a new one.
You might choose to stay with the same lender or explore offers from other lenders or a mortgage broker. Just be cautious of applying for multiple agreements at once, especially if they involve hard credit searches, as this can affect your credit score.
Fortunately, many mortgage advisers and mortgage providers offer a simple online process to update your details and renew your mortgage in principle quickly.
Why Is a Mortgage in Principle Important When House Hunting?
Having a mortgage in principle in place is a smart move when starting your property search. Here’s why:
- It shows estate agents you’re a serious buyer.
- It gives you a clear idea of how much you can borrow, helping you set a realistic budget.
- You can use a mortgage calculator to estimate your potential mortgage repayments based on the amount in your agreement in principle.
- It helps you compare mortgage deals and find the right mortgage before committing to the mortgage application process.
- It shows you are credit worthy and gives sellers more confidence
It’s also a valuable tool for first-time buyers or those climbing the property ladder, as it offers peace of mind before making any formal commitments.
How Does a Mortgage in Principle Work?
The process for getting a mortgage in principle is straightforward:
- Apply online or through a mortgage broker or lender.
- Provide key details about your income, employment status, and monthly outgoings.
- The lender may run a soft credit check (or occasionally a hard credit search) to assess your credit history.
- You’ll receive a decision on how much you might be able to borrow.
- Use this figure to guide your property search.
Once you’ve had an offer accepted on a property, you’ll need to submit a full mortgage application and provide supporting documents like bank statements and proof of income.
Is a Decision in Principle Different to an Agreement in Principle?
In short, no. A decision in principle (DIP), mortgage agreement in principle (AIP), mortgage promise, and agreement in principle all mean the same thing. These terms are often used interchangeably by mortgage lenders, estate agents, and mortgage brokers.
They all refer to a document or statement confirming how much you could potentially borrow based on a quick review of your income, credit history, and personal circumstances. Just remember — it’s not a guaranteed mortgage offer and the terms can change once you submit your full mortgage application.
My Credit Rating Is Poor — Can I Still Apply for a Mortgage?
Yes, even with a poor credit rating, you can still apply for a mortgage, though your options may be more limited. Some mortgage providers specialize in helping buyers with low credit scores, offering mortgage deals tailored to their situation.
A few things to consider:
- Check if the mortgage in principle involves a soft credit check or hard credit search.
- Work with a mortgage broker who has experience with adverse credit cases.
- Review your credit file for errors before starting the application process.
- Avoid taking on new debts like car finance or credit cards before applying.
- Use a mortgage calculator to assess what you can realistically afford.
- Save a larger deposit — many lenders require this for buyers with poor credit.
Even though your principle application may be subject to stricter terms, securing a mortgage agreement in principle can still be possible.
Check your credit score today!
Each credit reference agency calculates your credit rating slightly differently and has a different scoring system. Which means that what counts as a good credit score will depend on which of the four major agencies your lender uses.
Experian, Equifax, Crediva and TransUnion, each credit agency could have different information showing, therefore, we have teamed up with Check My File. Their services provide not only a free 30-day trial but also a comprehensive credit report from all four agencies. This ensures our mortgage advisors can easily identify any credit rating issues.
To obtain your report, click the link below for a 30-day free trial with CheckMyFile. After the trial, a monthly subscription fee of £14.99 will apply, with the flexibility to cancel anytime.
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Frequently Asked Questions
How long does a mortgage in principle last before it expires?
Most agreements last 60 to 90 days, though it depends on the lender’s criteria.
Will getting a mortgage in principle affect my credit score?
Generally, no, most lenders use a soft credit check. However, some may run a hard credit search, so confirm before applying.
Can I get multiple mortgage agreements in principle from different lenders?
You can, but too many hard credit searches in a short time can negatively affect your credit file and credit score.
Is a mortgage in principle legally binding?
No, it’s not a commitment to lend and doesn’t guarantee a mortgage offer. You’ll need to go through a full mortgage application process.
Do estate agents ask for a mortgage in principle?
Yes, often. It shows you’re a serious buyer with a realistic budget and helps speed up the home buying process.
Final Thoughts
A mortgage in principle typically lasts between 60 and 90 days and is an essential step in securing your dream home. It gives you a strong position when dealing with estate agents, helps you estimate mortgage repayments, and puts you ahead on the property ladder.
If you’re ready to get a mortgage, speak to a mortgage broker or mortgage advisers for tailored advice and find out which mortgage deal works best for your personal circumstances.
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