As the UK housing market grows more competitive, one crucial step in the home-buying journey – securing a mortgage in principle – remains misunderstood by many. A recent survey of 500 prospective homeowners revealed that 1 in 3 buyers are unclear about what a mortgage in principle entails, despite its crucial role in the process.
To shed light on how a mortgage in principle can help secure your dream home, we spoke with Terry Higgins, Group MD at TNHG, to address some of the most common questions.
What is a Mortgage in Principle?
Terry explains:
“A mortgage in principle, or agreement in principle, is an estimate from a lender of how much they might lend you based on basic details like your income, expenses, and credit history. It’s not a guaranteed offer like full mortgage approval, which requires a deeper look at your finances and the property you want to buy. Since every situation is different, it’s important to speak with a mortgage adviser early to understand your options.”
Why is it so important?
Two-thirds of buyers we surveyed agree that having a mortgage in principle makes them more appealing to sellers—and they’re right. Mortgage advisor Terry explains how this simple step can streamline the home-buying process.
“Getting a mortgage in principle is an essential first step as it helps you understand your budget before viewing properties. It can prevent the disappointment of looking at homes beyond your financial reach and flag any potential issues with your credit. It also shows sellers you're a serious buyer.”
How does a mortgage in principle improve your credibility?
One-third of prospective buyers admit they are confused when it comes to the process of securing a mortgage in principle. Yet, understanding it’s significance can boost your credibility with lenders and sellers, says Terry.
“Having a mortgage in principle boosts your credibility with estate agents and sellers. It shows you've passed initial financial checks, are serious about buying, and have a clear budget. This is especially helpful with new build developers, who often need proof you can move forward before reserving a property.”
What are the benefits of being prepared?
The survey also found that 58% of buyers believe getting a mortgage in principle before searching for a home is very important.
“Getting a mortgage in principle is usually quick—once you provide the lender with the required information, it can take just minutes. These agreements typically stay valid for 60 to 90 days, though this varies by lender. Keep in mind, circumstances can change during this time, which might impact your final application.”
Common mistakes buyers make when applying for a mortgage in principle revealed
Applying for a mortgage in principle can be straightforward, but buyers often make avoidable mistakes. Mortgage expert Terry advises:
“Common mistakes include not checking your credit report first, applying for multiple mortgages in principle without guidance (which can hurt your credit score), and not having the right documents ready. Another common error is not being fully honest about your finances. Every buyer’s situation is different, so it’s always best to get personalised advice from a mortgage specialist.”
How to prepare for a successful mortgage in principle application
Finally, taking the time to prepare properly can make the process smoother and increase your chances of success. Terry shares his best tips below:
“Preparation is key to securing a mortgage in principle. Start by reviewing your credit report, gathering documents like proof of income and bank statements, and understanding your regular expenses. Requirements can vary, so it’s a good idea to speak with a mortgage specialist early on. They can guide you on what’s needed and help you submit a strong application.”
If you are interested in Barratt's collection of new homes, you can get in touch with one of our Sales Advisors to find the best mortgage deals for your circumstances
Methodology:
We surveyed 500 prospective homebuyers in the UK using OnePulse. Survey conducted January 2025.
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