• The Create Finance Team

Mortgage Myth 2: You don’t need to think about mortgages until you’ve found your dream property.

Updated: Apr 2, 2019

You won’t need to actually apply for a mortgage until you’ve had an offer on a property accepted, but you certainly need to have checked what you can afford.

Different lenders will offer different amounts, but a good way of getting an accurate idea of your budget is to obtain a mortgage ‘agreement in principle’ (AIP).

This is a statement from a lender that they would, in principle, lend you a certain amount of money.

What is a mortgage in principle?

Also known as a ‘Decision in Principle’ (DIP), a mortgage in principle is a certificate or statement from a lender to say that ‘in principle’ they would lend a certain amount to a particular prospective borrower or borrowers based on some basic information.

In almost all cases a Decision in Principle will be undertaken by a lender prior to any application being made. The information that you provide will allow the lender to check your credit file helping them establish whether you are mortgageable and if they are happy to lend the amount you require.

A Decision in Principle can be submitted at any point in your journey in obtaining a mortgage.

If you are looking to purchase a house then an estate agent will often want to ensure that when you are making your offer that you will be able to obtain a mortgage and for the amount you require, on top of your deposit, in order to proceed to completion.

It is important that you have taken advice on products and lenders that you might proceed with as a DIP can leave a soft or hard footprint on your credit file.

DIPs can be confusing, but Create Finance has Mortgage Advisers who can provide you with completely independent and impartial advice, tailored to your individual circumstances, about when and who you should look to be completing a DIP with.

As independent mortgage brokers, if you decide you’d like to take out a DIP we can also arrange one for you.

Speak to Create Finance today.

Think carefully before securing other debts against your home. As a mortgage is secured against your home or property, it may be repossessed if you do not keep up with repayments on your mortgage.

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