How to Get Preapproved for a Mortgage

Now, imagine you’ve found your dream home, but the estate agent asks if you have a mortgage “in principle” before you can even put in an offer.

In today’s competitive UK housing market, sellers often want to see proof that you can get a mortgage.

In fact, nearly 7 in 10 mortgage customers in 2024 were first-time buyers, so having a pre-approval can help you stand out from the crowd.

However, to get preapproved for a mortgage in the UK, you’ll need to secure a Mortgage Agreement in Principle (AIP). 

This involves checking your credit and finances, gathering key documents (like payslips and bank statements), and approaching a lender to assess how much they might lend you.

Sounds a bit confusing or intimidating? Don’t worry. 

This guide will walk you through how to get preapproved for a mortgage (also known as a mortgage in principle) in simple steps, so you can be better prepared on your home-buying journey.

What Is a Mortgage Pre-Approval (Agreement in Principle)?

A mortgage pre-approval in the UK is commonly called a Mortgage Agreement in Principle (AIP), also referred to as a Decision in Principle (DIP) or Mortgage in Principle (MIP).

It’s essentially a written estimate from a lender of how much they might be willing to lend you for a home purchase or re mortgage. 

Importantly, this is not a final mortgage offer but an  indication based on a quick check of your financial situation.

The lender usually looks at your income, basic expenses, and sometimes does a credit check to decide the tentative loan amount.

Your Agreement in Principle will typically be valid for around 30 to 90 days. During this time, you can use it to show estate agents and sellers that you have financing lined up.

Why You Should Get Pre-Approved for a Mortgage?

Securing a mortgage pre-approval before house-hunting has a number of benefits:

Know Your Budget

First and foremost, an AIP tells you roughly how much you can borrow in most cases. This gives you a clear price range for properties. 

Also, this ensures you don’t waste time on homes outside your affordable range and have more confidence in what you can offer.

Shows Sellers You’re Serious

Having a mortgage in principle signals to sellers (and estate agents) that you mean business. 

In a hot market, sellers may even require an AIP letter before considering your offer. From their perspective, a buyer with pre-approval is less likely to fall through. 

Faster Offer Process

With a pre-approval ready, you can move quickly when you find the right house. You won’t need to scramble to get financing at the last minute. This can give you an edge in negotiations.

Identify Issues Early

Going through the pre-approval process might uncover any credit or affordability issues early on. 

If there’s a problem (say, an error on your credit report or a detail in your finances), it’s better to learn about this before you actually apply for the mortgage.

How to Get Preapproved for a Mortgage (Mortgage in Principle)

Getting preapproved for a mortgage in the UK is a fairly straightforward process. Below are the general steps and tips to guide you:

1. Check Your Credit and Financial Health

Before applying for any mortgage in principle, it’s wise to give your credit score and finances a once-over. 

Lenders will look closely at your credit history and overall financial situation to decide if and how much they’re willing to lend.

Review your credit reports: Obtain your credit reports from the three main UK credit reference agencies (Experian, Equifax, and TransUnion) and ensure all information is correct.

Improve your credit if needed: If your credit score isn’t in the best shape, take some time to improve it. Simple steps like registering on the electoral roll, paying down existing debts, and making all bill payments on time for a few months can help.

Avoid new debt: In the run-up to your mortgage pre-approval, try not to take on new loans or credit cards. Each new credit application leaves a mark on your report and could affect your affordability calculations.

By ensuring your financial health is good, you increase the chances that your pre-approval application sails through.

2. Save Up (or Confirm) Your Deposit

Your deposit (the upfront amount you contribute toward the home purchase) is a crucial part of the equation.

UK lenders typically require a minimum of 5-10% of the property price as a deposit for residential mortgages. 

However, a bigger deposit can significantly improve the mortgage deals you’re offered and your likelihood of approval.

You can learn more about average first-time buyer deposits in this article.

If you haven’t saved enough for a deposit yet, it might be worth waiting and saving a bit more before getting a mortgage in principle. 

That being said, some lenders offer 5% deposit mortgages (95% LTV), often under special schemes or with higher interest rates.

Check if you’re eligible for any first-time buyer benefits that could boost your deposit or offer lender guarantees.

3. Gather the Necessary Documents

One way to speed up your mortgage pre-approval is to have all your documentation ready.

While getting an Agreement in Principle is generally simpler than a full mortgage application, being prepared pays off. 

Lenders might base the AIP largely on information you provide (since it’s an early stage), but having proof handy will become vital once you proceed to the full application.

It’s good to start collecting these items early:

Proof of Income: Typically, your last 3 months’ payslips and your most recent P60.

Bank Statements: Lenders often want to see the last 3 to 6 months of bank statements for your main current account.

Proof of Deposit: If your deposit is saved in an account, a statement showing the balance helps. If family is gifting it, a letter from them stating the amount and that it’s a gift (non-repayable) will be needed by the time of full application.

ID and Address: A valid passport or driving licence to prove your identity, and a recent utility bill or council tax bill to prove your address (usually within the last 3 months).

Employment Details: Have your employer’s name and address and your job contract or HR contact info ready, in case verification is needed. If you’re self-employed, be prepared with at least two years’ audited accounts or tax returns to prove your income.

4. Choose a Lender or Broker and Apply for the AIP

Now that your finances are in shape and your paperwork is ready, it’s time to actually get the mortgage pre-approval. 

You have two main routes: go directly to a lender (bank or building society) or use a mortgage broker who can shop around for you.

Use a Mortgage Broker

If you feel unsure or have any unique circumstances (like irregular income, lower credit score, etc.), a mortgage broker can be very helpful. 

Mortgage advisors have knowledge of various lenders’ criteria and can guide you to one that’s likely to pre-approve you.

They can also handle the AIP application on your behalf and, later, the full application, simplifying the process for you.

Go Directly to A Lender

Many high-street banks and specialist mortgage lenders offer a facility to apply for a Mortgage in Principle online or in-branch. 

It’s worth checking a few to compare how much they might lend and what rates they’re advertising for when you move to a full application. 

Keep in mind, the AIP itself often won’t lock in an interest rate yet, as it’s more about the amount. 

Look for lenders that cater to your situation (for instance, some have better deals for first-time buyers or for certain professions).

5. Application Information

Whether through an advisor or directly, you’ll need to fill in personal details to get preapproved for a mortgage.

This includes things like your name, date of birth, 3-year address history, income, regular expenses, and the estimated property price and deposit you’re aiming for.

Provide honest and accurate information. Lenders use this to run an affordability assessment.

When you submit the AIP application, the lender will run a credit check to evaluate your creditworthiness. 

Some lenders do a “soft” credit search at this stage, which does not leave a visible mark on your credit file, while others do a “hard” credit search that will show up to other lenders.

The advantage of a soft check is that you can get pre-approvals from multiple lenders without harming your credit score. 

Hard checks, on the other hand, are more in-depth; one or two in most cases are fine, but too many hard searches in a short time can negatively impact your credit rating.

How Long Does It Take to Get Preapproved for a Mortgage?

The good news is that getting a mortgage in principle is usually fast. Many lenders will give you a decision within minutes or hours if done online.

In fact, if you have all the info ready, you could get an AIP in as quickly as an hour from some online lenders. Others might take a day or two if a manual review is needed.

You’ll either receive a certificate/document via email or post, or be able to download it, stating that you have a mortgage agreed in principle for £X amount.

After applying, you’ll typically get one of three outcomes:

• Approved (you receive the AIP certificate showing the maximum amount)
• Referred (needs more information or manual review)
• Declined

If you are declined or the amount is much lower than you expected, don’t panic. Consider speaking to a mortgage advisor who might suggest another lender more suited to your situation.

What Happens After I Have a Mortgage in Principle?

After getting an AIP, you can start house hunting in earnest (if you haven’t already). 

Once you find a property and agree on a price with the seller, you’ll go back to your chosen lender to submit a full mortgage application. 

At that stage, the lender will do a deeper dive into your finances and also evaluate the property you’re buying. 

They’ll require the documents to prove your income, run full underwriting checks, and conduct a valuation survey on the home.

If all checks out, the lender will issue a formal mortgage offer, which is the definitive loan offer tied to that property (usually valid for 6 months).

Lastly, after the official mortgage offer, you proceed with final legal steps (conveyancing), and then you’ll be ready to complete the purchase of your new home.

Frequently Asked Questions

Does getting a mortgage Agreement in Principle affect my credit score?

It depends on the lender’s process. Some lenders do a soft credit check for a mortgage in principle, which does not impact your credit score, while others perform a hard credit check that leaves a footprint on your credit report. 

How long does a mortgage pre-approval (agreement in principle) last?

Most mortgage pre-approvals in the UK are valid for about 60 to 90 days (roughly 2–3 months).

Do I need a mortgage in principle before making an offer on a house?

It’s not a legal requirement to have a mortgage in principle to make an offer, but it’s often highly recommended. In competitive markets, many estate agents or sellers will ask if you have an AIP and may prefer buyers who are preapproved.

Can I get preapproved by multiple lenders (more than one Agreement in Principle)?

Yes, you can obtain multiple mortgage in principle letters from different lenders, and some homebuyers do this to compare deals.

Your home may be repossessed if you do not keep up repayments on your mortgage.

All content is written by qualified mortgage advisors to provide current, reliable and accurate mortgage information. The information on this website is not specific for each individual reader and therefore does not constitute financial advice.