Get Mortgage Ready with a Decision in Principle (DIP)
A Decision in Principle (DIP), sometimes referred to as an Agreement in Principle (AIP) or Mortgage in Principle, is often one of the first steps in the home-buying process.
At Humble Mortgages, we help clients obtain a Decision in Principle from a mortgage lender, providing an indication of how much they may be able to borrow based on their circumstances and the lender’s initial assessment.
Having a DIP in place can strengthen your position when viewing properties, making offers and speaking with estate agents, while giving you greater confidence about your potential borrowing range.
What Does a Decision in Principle Involve?
The process is typically straightforward and can often be completed quickly.
Initial Discussion
We discuss your circumstances, property goals and borrowing requirements.
Affordability Assessment
We review your income, expenditure and financial commitments to identify suitable lender options.
Credit Review
Where appropriate, we consider your credit profile and any factors that could influence lender decisions.
Lender Selection
We help identify a lender whose criteria may be suitable for your circumstances.
Submission of the DIP
We submit the application and guide you through any additional requirements requested by the lender.
What Is a Decision in Principle (DIP)
A Decision in Principle is an initial indication from a mortgage lender outlining how much they may be willing to lend, subject to a full mortgage application and underwriting process.
The lender will usually assess information such as:
- Income and employment details
- Self-employed earnings
- Existing credit commitments
- Credit history
- Deposit available
- Basic affordability requirements
A DIP is not a formal mortgage offer, but it can provide reassurance that you are likely to meet a lender’s initial lending criteria.
Who Can Benefit from a Decision in Principle? (DIP)
First-Time Buyers
Gain confidence before beginning your property search and understand your potential borrowing range.
Home Movers
Assess affordability before placing your property on the market or making offers on a new home.
Self-Employed Applicants
Understand how lenders may assess business income, salary, dividends or contractor earnings.
Buy-to-Let Investors
Secure an indication of borrowing potential before pursuing investment opportunities.
Remortgage Clients
Explore future borrowing options when considering a property purchase alongside a remortgage strategy.
Clients with Complex Circumstances
We regularly assist clients with non-standard income, previous credit issues and more complex borrowing requirements.
Benefits of a Decision in Principle
A Decision in Principle can provide reassurance and clarity before making important property decisions.
Key benefits include:
- An indication of your potential borrowing amount
- Greater confidence when viewing properties
- Improved credibility with estate agents and sellers
- Early identification of affordability or credit concerns
- A clearer understanding of your property budget
- Better preparation for a full mortgage application
- Increased confidence when making offers
Frequently Asked Questions
Is a Decision in Principle the same as a mortgage offer?
No. A Decision in Principle is an initial indication of borrowing potential. A formal mortgage offer is only issued following a full application and lender underwriting.
Does a DIP guarantee I will be approved for a mortgage?
No. A DIP does not guarantee approval. The lender will still need to complete a full assessment of your application and supporting documentation.
How long does a Decision in Principle last?
This varies between lenders, but many DIPs remain valid for between 30 and 90 days.
Will a DIP affect my credit score?
Some lenders carry out a soft credit search, while others may perform a hard credit search. We can advise on the most suitable approach for your circumstances.
Do I need a Decision in Principle before viewing properties?
Not always, but many estate agents and sellers view buyers with a DIP more favourably as it demonstrates financial preparedness.
Apply for a Decision in Principle
A Decision in Principle can be an important step towards purchasing a property and understanding your mortgage options.
Contact Humble Mortgages today to discuss your circumstances and begin your Decision in Principle application with confidence.
