Your guide to getting a Decision in Principle

What is a Decision in Principle?  

Getting a Decision in Principle (DIP) before you start viewing houses can help you act faster, appear serious to sellers, and move smoothly through the mortgage application process.  

A Decision in Principle is a document from a lender that shows how much you could borrow. It's not a guaranteed mortgage offer, but it does give you a clear idea of your budget.

Sellers and lenders can ask to see one to prove you're in a position to buy.

Other names for a Decision in Principle include: 

• Agreement in Principle (AIP)  
• Mortgage in Principle 
• Mortgage promise 

Why do I need a Decision in Principle?  

A Decision in Principle give you confidence as a buyer and helps others take you seriously. It means:

• You'll know how much you may be able to borrow.
• Estate agents can recommend homes in your price range.
• Sellers will see you as a committed buyer.
• You can be ready to move fast if you want to make an offer.

While it's not a mortgage offer, it's a key first step towars home ownership.  

An example: Lisa and Paul’s story  

Lisa and Paul are first time buyers with two children. Lisa earns £25,000, and Paul earns £23,000. They've seen a home they like for £220,000 and are going to view it this weekend.

Before the viewing they speak to Kate - a mortgage advisor at Principality. Kate helps them work out they could borrow up to £215,000. They secure a Decision in Principle, showing the amount Principality could lend them. As they have £15,000 saved for their deposit, the property they're viewing is well within their price range. 

They'll bring their Decision in Principle document to the viewing to show the estate agent, along with proof of their deposit amount. This shows they're serious, and ready to make an offer if they like the property.

If their offer is accepted, they can return to Principality to make a full mortgage application.  

Get a Decision in Principle 

Find out how much you could borrow and get a DIP over the phone in around 30 minutes.