Everything you need to know about a Mortgage in Principle

A Mortgage in Principle is often the first step when it comes to buying your own home. In this guide, we cover all the questions you might have about what it is and why you need one

What is a MIP, AIP and a DIP?

A Mortgage in Principle (MIP), Agreement in Principle (AIP) and a Decision in Principle (DIP) are all the same thing. In this guide, we’ll refer to these as Mortgage in Principles - MIPs. They are an official document that shows how much you can afford to borrow for your mortgage. You often get an MIP when you start looking to buy a property, and it shows the estate agents and sellers that you’re serious about buying.  

Do I need a Mortgage in Principle?

In short, no. But having one does make estate agents and sellers view you as a serious buyer, and can speed up the home-buying process. Some estate agents might insist on you having one before showing you houses, so you could be delayed in viewing a home if you don’t have one.  

When should I get a Mortgage in Principle?

Having an MIP when you’re ready to start viewing a home allows you to have everything that you need to accelerate your mortgage application when you’re ready to make an offer.  

Does getting a Mortgage in Principle affect my credit score?

Some MIPs require soft credit checks, which means no mark will be left on your credit file and it won't affect your score.  Where possible, our advisers will make sure they provide you with a MIP using a soft credit check. We will always ask your permission before doing any kind of hard credit check.  

Why should I get a Mortgage in Principle through OpenMoney instead of going direct to a mortgage lender?

We use our expertise to find you a mortgage lender that will most likely accept you and your circumstances to provide you with an MIP.  

If you are very financially healthy, you could go direct to a lender with no difficulties. However, we can do the work to find you a lender that doesn’t do a hard credit check, which negatively impacts your credit score.  

Does a Mortgage in Principle guarantee a mortgage?

No, an MIP doesn’t guarantee that your application for a mortgage will be accepted, and it doesn't guarantee about the amount that you can borrow. Initial credit checks are limited (soft credit check), so the lender doesn’t have a full view of your financial situation.  

How long does a Mortgage in Principle stay valid for?

A MIP will usually last for up to  90 days (3 months).

How do I get a Mortgage in Principle?

  • Login to your OpenMoney account (or register if you don’t already have one)  
  • Complete your personal details. We need to know about your income, your outgoings and current budgeting.
  • After this, you can click “Get a MIP” and an adviser will contact you within 1 working day.  
  • Once a lender has given you an MIP, a certificate will be uploaded to your document log for you to share within anyone who requests it.

What happens if I can’t get a Mortgage in Principle?

If we can’t provide you with a MIP, we’ll give you a call to discuss ways to improve your circumstances so we can try again in future.  

What happens after I have gotten a Mortgage in Principle?

  • Once you’ve had an offer accepted, you can add the details of the property to the mortgage application in your account and once you have completed all of the questions, we’ll recommend you a mortgage.
  • You can then review your mortgage and if you accept our recommendation, we’ll get to work on applying for it.  
  • Remember mortgage deals change regularly and there’s no obligation to complete a mortgage application with the lender you received your MIP from. If a better deal comes available when you get your full recommendation, we can apply for a new MIP with the new lender.  

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