Obtaining a mortgage Agreement in Principle is quite straightforward. You can apply through a broker or directly with a lender online or via a telephone call.
During this stage of the mortgage process, you’ll need to share certain information with your broker or the lender. We go through some of this information below.
Information About You and the Property
You’ll need to state your name, current address, date of birth and residential history for the past 3 years upon applying for a mortgage Agreement in Principle.
Lenders, such as the bank or building society you apply with, will additionally ask you for information in these areas.
- Your income – you’ll need to share your exact monthly income, as well as your job title and company when applying for a mortgage Agreement in Principle
- Monthly outgoings – you’ll also need to supply information about monthly outgoings. This information will be used to estimate how much you spend each month and what you’ll be able to afford in mortgage repayments. If, for example, you gamble or spend a considerable sum of money each month, this could affect your application
- Any loans and debts you may have – to ascertain whether you’re eligible for a mortgage, you’ll need to outline any current loans, debts, or late payments in your credit history. It’s essential to be honest here, as this information will be provided by credit reference agencies such as Equifax and Experian when your mortgage Agreement in Principle application and mortgage loan request are processed
- The potential property – although you may have not found a property yet, some lenders may require that you enter details of the kind of property you’re after, such as – location, property type, price, etc.
If you’re applying for a joint mortgage, you’ll be asked to provide the above information for both borrowers.
Credit Scores and Ratings
A mortgage Agreement in Principle involves a credit check. The type of credit check conducted will depend on the bank, building society, or lender.
In most instances, a soft credit check is sufficient for a mortgage Agreement in Principle. Soft checks enable banks and building societies to get all the information they need about your credit history without leaving a footprint on your profile. Other lenders may conduct hard credit checks at the Agreement in Principle stage.
Hard credit checks provide the same information as soft checks, the main difference is that a hard credit check will leave a footprint on your credit profile. Too many hard credit checks in a short period of time can damage your credit score, so if this is something you’re concerned about, you can speak to your broker about applying for an Agreement in Principle with a lender that does soft credit checks at this stage.
