Decision in Principle
If you're thinking about buying a home, one of the first steps is getting a Decision in Principle. It's sometimes called a Mortgage in Principle or Agreement in Principle - they all mean the same thing.
A Decision in Principle (DIP) is a statement from a mortgage lender indicating how much they'd be willing to lend you, based on a quick look at your finances. It's not a guarantee - but it's a strong signal that you're likely to be approved for a mortgage up to that amount.
Book a Free ConsultationWhy Do You Need a Decision in Principle?
You don't technically need a DIP to start looking at properties - but you'll find things move much faster if you have one.
A DIP tells you exactly what you can afford, so you don't waste time viewing homes outside your price range.
Estate agents deal with a lot of time-wasters. Having a DIP shows you've done your homework and you're ready to move.
When you make an offer, the seller wants to know you can actually complete. A DIP gives them confidence.
When you find the right property, you can move quickly. The groundwork is already done.
In Scotland, you'll almost always need a DIP before you can make an offer - it's part of the process there.
How Do You Get a Decision in Principle?
You can get a DIP directly from a bank or building society, or through a mortgage broker like me.
The process is straightforward. You'll need to provide some basic information:
- Your income (salary, self-employed earnings, or other income)
- Your regular outgoings and any existing debts
- How much deposit you have
- A rough idea of what you're looking to borrow
The lender will usually do a soft credit check - this won't affect your credit score. Based on this, they'll tell you if they'd be prepared to lend to you and up to what amount.
Most DIPs are valid for 60-90 days. If yours expires before you find a property, you can simply apply for a new one.
Why Use a Broker Instead of Going Direct?
You can absolutely go straight to your bank and get a DIP - it's quick and easy. But here's the thing: your bank will only tell you what they can offer. They won't tell you if there's a better deal elsewhere.
As a mortgage broker, I work with a wide range of lenders. Before we apply for a DIP, I'll make sure we're approaching a lender that actually suits your circumstances. This matters because:
Different lenders have different criteria
If you're self-employed, a contractor, or have anything unusual about your income, some lenders will be much more flexible than others.
Credit history matters
If you've had any credit issues in the past, I'll know which lenders are more likely to say yes.
Income calculations vary
Some lenders will include overtime, bonuses, or benefits in their affordability calculations - others won't. This can make a big difference to how much you can borrow.
Getting a DIP from the wrong lender is a waste of time. If they're not going to approve your full application anyway, what's the point? I'll make sure we get it right first time.
Soft Credit Check vs Hard Credit Check
You might have heard people worry about credit checks affecting their score. Here's what you need to know:
Soft Credit Check
Most lenders use this for DIPs. It leaves a mark on your file that only you can see - other lenders won't see it, and it won't affect your credit score.
Hard Credit Check
This happens when you make a full mortgage application. It leaves a footprint that other lenders can see. Too many hard checks in a short period can affect your score.
The good news: getting a Decision in Principle from most lenders won't harm your credit score. You can shop around for the best deal without worry.
A word of caution though - some lenders do run a hard check at DIP stage. I'll always check this before we apply, so there are no surprises.
What Happens After You Get a DIP?
A Decision in Principle isn't a mortgage offer - it's more like a green light to proceed. Once you've found a property and had an offer accepted, we'll move to the full mortgage application. This is where the lender takes a closer look:
- They'll verify your income with documents (payslips, accounts, bank statements)
- They'll do a full credit check
- They'll value the property to make sure it's worth what you're paying
Assuming everything checks out, you'll get a formal mortgage offer. That's when things get legally binding.
Can you be declined after getting a DIP?
Yes, it's possible - usually if your circumstances have changed, or if something comes up on the full credit check that wasn't visible before. This is another reason why working with a broker helps: I'll flag any potential issues upfront so there are no nasty surprises later.
Frequently Asked Questions
Ready to Get Started?
Getting a Decision in Principle is your first step towards buying a home. I offer free, no-obligation consultations where we can go through your situation, find the right lender for your circumstances, and get your DIP sorted - usually within 24 hours.
Whether you're a first-time buyer taking your first steps, or you're moving home and want to know where you stand, I'm here to help.
Book a Free ConsultationYour home may be repossessed if you do not keep up repayments on your mortgage.
