What is a mortgage decision in principle?
Updated: Mar 2, 2021
If you want to improve your chances of being accepted for a mortgage, you should apply for a Decision In Principle (DIP), also known as a mortgage in principle.
These are statements you’ll get from either a broker or lender saying you should be able to borrow a certain amount of money, subject to further checks of your credit and the property you’re buying. Normally a broker or lender will ask about your basic finances such as income and expenses, as well as your deposit value and they may also perform a credit check. Once completed you will have a DIP statement showing how much you can realistically borrow as a mortgage. This will normally be valid for 60 to 90 days depending on the lender.
Once you have this you can then look at what property is within your price range. It also helps you to stand out as a more attractive buyer having taken the first steps towards a mortgage.