Guide For First Time Buyers: What Is A Mortgage In Principle?

When you are buying a home for the first time, you may hear a lot of terminology that you haven’t come across before. Here at Mandairs Estate Agents we help lots of first-time buyers with the house buying process. We know it’s an exciting time, but it can be a stressful and worrying time too. Our estate agents in Peterborough are here to help you, every step of the way.

So, let’s look at what a mortgage in principle is. We will also look at if you need one and why. Finally, we will cover when you need to get your mortgage in principle.

What Is A Mortgage In Principle?

A mortgage in principle has two other names that it is referred to as. These are an agreement in principle, or an AIP, or a decision in principle, or a DIP. It is a written indication from the mortgage lender that states how much they may be prepared to lend you. It is not legally binding, and the mortgage lender could refuse you a mortgage at a later date. However, it is a very useful indicator of what you could borrow. This means that you will look at the right houses within your budget.

Why Should I Get A Mortgage In Principle?

You may be thinking that it would be easier to just get a mortgage, instead of a mortgage in principle. The issue with this is that it takes time. A mortgage in principle can take as little as an hour to complete and approve. This allows you to start house hunting sooner. If you were to apply for a mortgage instead, this would take a lot longer and the mortgage lender would need to know the address the mortgage is for too.

Do I Need A Mortgage In Principle?

While it isn’t compulsory to have a mortgage in principle, there are a few reasons why you might want to get one. For example, by having a mortgage in principle, you know what you can afford and what your limits are. You may be able to afford more than you think, or you might need to scale back on your house dreams. However, you won’t know this until you have a mortgage in principle.

Here at Mandairs Estate Agents we have a mortgage advisor that you can speak too. They will talk to you about what you can afford and support you in gaining a mortgage in principle. You will then be able to book viewings for all the homes you want to see.

When Should I Get My Mortgage In Principle?

When you have decided that you want to start house hunting, you need to get your mortgage in principle. If you call our team and speak to our mortgage advisor, we can help you see how much you can afford and line up some house viewings within your budget for you.

Are you a first-time buyer looking to buy your first home? Call us now to see what we have available.