Mortgage Decision in Principle

A decision in principle certificate will be offered by a lender who a) offers the service, and b) has credit checked, credit scored, and applied their income multiple criteria, to brief information supplied by a potential mortgage applicant.

Subject to the valuation of the property, and the information supplied by the applicant being correct, it's 95% of the way to guaranteeing a mortgage offer.

A decision in principle should always be obtained as early in the home buying process as possible. It is of little use to anybody, to make an offer on a property, without being sure that you can obtain the required mortgage.

The harshness with with lenders apply credit scoring varies a little, but there is much more variation in the income multiples that they use. For this reason, a potential borrower may pass credit scoring, but have their maximum loan amount restricted. It pays therefore to know that the lender is ok with the income multiples, prior to requesting an agreement in principle. 

You can spend an afternoon on line doing it yourself, or simply ask any mortgage broker to do it for you.

If you'd like me to obtain a decision in principle for you, contact me here.

Potential bidders on a property, who can produce a decision in principle certificate for the estate agent, will be taken seriously, particularly if they are first time buyers.

If you are unable to obtain a decision in principle, it will usually be for one of reasons:

1. Failed credit scoring - possibly due to adverse credit that the applicant had no knowlege of.
2. Insufficient income.

If you fail credit scoring, you need to find out why. You can obtain a copy of your credit reference file here. Any adverse credit, that has affected the lenders decision, should show up here.

If your income is deemed insufficient, other lenders can be approached, or it may take some financial creativity to make the deal happen. This does not mean lying about your income. Depending on your circumstances, a good mortgage broker may be able to make suggestions to improve your position. To talk to me about this click here.