Understanding Your Mortgage in Principle: A First-Time Buyer’s Guide

If you’re thinking about buying your first home, one of the first terms you’ll hear is “Mortgage in Principle” (often shortened to MIP or Agreement in Principle). It sounds formal and maybe a bit intimidating but it’s actually one of the most helpful tools you can have as a first-time buyer.

In this blog, we’ll explain what a Mortgage in Principle is, why it matters, how to get one, and how to use it confidently when you start viewing and offering on homes.

Home at Last can help you every step of the way. Book a free 15-minute consultation today and let's prepare you for your homebuying journey.

What is a Mortgage in Principle?

A Mortgage in Principle is a statement from a lender (or mortgage broker) confirming how much they may be willing to lend you, based on some initial financial information.

It’s not a full mortgage offer, but it gives you and estate agents a clear idea of your budget.

A MIP is usually valid for 60–90 days and can be updated if your circumstances change.

• Why is a Mortgage in Principle so important?

For first-time buyers, a MIP does three crucial things:

1. It shows sellers you’re a serious buyer

Estate agents often ask whether you have a Mortgage in Principle before allowing viewings or accepting offers. Having one tells them you’re financially prepared and not just browsing.

2. It sets a realistic budget

It’s easy to browse properties that look affordable on paper until you factor in lender limits. A MIP helps you search within a realistic price range, saving time and disappointment.

3. It strengthens your offer

If two buyers make similar offers, the one with a Mortgage in Principle is often seen as lower risk especially if they’re chain-free.

• What information do you need to get a Mortgage in Principle?

To get a MIP, lenders or brokers will typically ask for:

• Your income and employment status

• Basic monthly outgoings (loans, credit cards, childcare, etc.)

• Your deposit amount and source of funds

• Your credit history (sometimes via a soft credit check)

• Your current address and residency status

The process is usually quick and will often take 10–30 minutes online or via a broker.

Does a Mortgage in Principle affect your credit score?

This is a common concern and the good news is:

• Most Mortgage in Principles use a soft credit check, which does not impact your credit score.

• Some lenders may perform a hard check, but this should always be made clear upfront.

• A mortgage broker can help you obtain a MIP without unnecessary credit searches, protecting your score.

How much can you borrow with a Mortgage in Principle?

As a rough guide, many lenders offer between 4 - 4.5 times your annual income, though this depends on:

• Your credit score

• Your monthly commitments

• Your employment type

• The size of your deposit

For example: If you earn £45,000, a lender may offer between £180,000–£202,500, before adding your deposit.

A MIP gives you clarity but it’s still an estimate, not a guarantee.

What a Mortgage in Principle does Not guarantee

It’s important to understand the limits:

• It does not guarantee final mortgage approval

• It does not lock in an interest rate

• It can change if your finances change.

Your full mortgage application will still require:

• Detailed affordability checks

• Document verification

• A property valuation

Think of a MIP as step one, not the finish line.

When should you get a Mortgage in Principle?

Ideally, before you:

• Book serious property viewings

• Make an offer on a home

• Start negotiations

If you’re 3–6 months away from buying, a MIP can also help you identify what to improve (e.g. deposit, credit score, debts) before applying.

Should you get a Mortgage in Principle through a Broker?

Many first-time buyers benefit from using a mortgage broker to arrange their MIP because brokers can:

• Access multiple lenders (not just one bank)

• Match you with lenders suited to first-time buyers

• Avoid unnecessary hard credit checks

• Advise whether to apply now or wait

This can be especially valuable if you’re self-employed, have a smaller deposit, or limited credit history.

How Home at Last can help

At Home at Last, we can:

• Help you understand what a realistic budget looks like

• Refer you to trusted mortgage brokers who specialise in first-time buyers

• Review your deposit, credit score, and next steps

• Support you through viewings, offers and negotiations

Book a free 15-minute consultation today we'll help you take the right first step!

A Mortgage in Principle isn’t just a formality it’s a powerful tool that gives you confidence, credibility, and clarity as a first-time buyer.

If you’re thinking about buying your first home, getting your MIP sorted early can make the entire process smoother and far less stressful.

Your journey to homeownership starts with understanding your numbers and you don’t have to do it alone. Book a free consultation with Home at Last. If you're considering buying your first home – talk to our experts at Home at Last.

 

Disclaimer:

This information is for general guidance only and does not constitute professional advice. The content is based on the author's research and opinions at the time of writing. Please consult with  qualified professionals before making any investment, financial, or business decisions.