Buying a home is exciting, but it can feel overwhelming too. One of the first steps many people take is getting a mortgage in principle (MIP). If you are wondering what it is and how long it lasts, you are in the right place.
What Is a Mortgage in Principle?
A mortgage in principle is like a sneak peek at whether a lender might give you a mortgage.
It is not a final approval, but it shows sellers and real estate agents you are serious about buying.
Think of it as a letter from a lender saying, “We think you can borrow this much based on what we know so far.”
It is also called an agreement in principle or decision in principle, depending on the lender.
This document gives you a rough idea of your budget when house hunting. It can also make you stand out to sellers because it shows you have done your homework.
But here is the big question: how long does this handy document last? Let us find out.
How Long Does a Mortgage in Principle Last?
Typically, a mortgage in principle lasts between 60 and 90 days. However, this can vary depending on the lender.
Some might offer a shorter period, like 30 days, while others extend it to six months in rare cases.
Why does this matter?
Because once it expires, you will need to reapply if you have not found a home yet.
Here is a quick look at common validity periods:
| Lender Type | Typical Validity Period |
|---|---|
| High Street Banks | 60-90 days |
| Online Lenders | 30-90 days |
| Specialist Lenders | 90-180 days |
The validity period starts from the day the lender issues the MIP.
If your circumstances change, like your income or credit score, the lender might not offer the same terms when you reapply.
So, it is smart to keep your finances stable while house hunting.
Why Does the Validity Period Matter?
The validity period is like a ticking clock. It tells you how long you have to find a property before the MIP expires.
If it runs out, you might need to go through the application process again, which can take time and effort.
Plus, if your financial situation changes, the lender might offer different terms, like a lower loan amount or a higher interest rate.
Having a valid MIP also gives you an edge in a competitive market.
Sellers often prefer buyers who have their finances in order. It shows you are ready to move forward without delays.
So, knowing how long your MIP lasts helps you plan your house hunt better.
Factors That Affect the Validity Period
Not all mortgage in principle agreements are the same. Several factors can influence how long yours lasts.
Let us break them down:
- Lender Policies: Every lender has its own rules. Some stick to a standard 90 days, while others might offer more or less time.
- Type of Mortgage: If you are applying for a standard mortgage, the validity might be shorter. Specialist mortgages, like those for self-employed buyers, might have longer periods.
- Your Financial Profile: Lenders might adjust the validity based on your credit score or financial stability. A strong profile could mean a longer validity in some cases.
- Market Conditions: In a fast-moving housing market, lenders might shorten validity periods to reflect changing interest rates or property prices.
Always check with your lender to confirm the exact validity period. It is also a good idea to ask if they can extend it if needed.
What Happens When It Expires?
If your mortgage in principle expires, do not panic. It just means you need to reapply. The process is usually straightforward, especially if nothing has changed in your finances.
Here is what to expect:
- Updated Credit Check: The lender will likely run a new credit check to make sure your financial situation is still solid.
- New Documents: You might need to submit updated documents, like recent payslips or bank statements.
- Possible Changes in Terms: If interest rates or your finances have changed, the new MIP might have different terms, like a different loan amount or rate.
To avoid surprises, start your house hunt as soon as you get your MIP.
That way, you can make the most of the validity period.
How to Make Your Mortgage in Principle Last Longer
While you cannot always extend the validity period, you can take steps to make the most of it.
Here are some tips to keep your MIP useful for as long as possible:
- Start House Hunting Early: The sooner you start looking, the more time you have to find a property within the validity period.
- Keep Your Finances Stable: Avoid big changes, like switching jobs or taking on new debt, as these could affect a new application.
- Talk to Your Lender: Some lenders might offer an extension if you are close to making an offer on a property. It never hurts to ask.
- Work with a Mortgage Broker: A broker can help you find lenders with longer validity periods or guide you through the reapplication process.
By planning ahead, you can avoid the hassle of reapplying and keep your home-buying journey smooth.
Soft vs. Hard Credit Checks: What You Need to Know
When you apply for a mortgage in principle, the lender usually does a soft credit check.
This type of check does not affect your credit score, which is great news. It gives the lender a quick look at your finances without leaving a mark on your credit file.
However, when you apply for the actual mortgage, the lender will do a hard credit check.
This one does show up on your credit report and could impact your score if you have multiple hard checks in a short time.
To avoid issues, try not to apply for multiple MIPs at once. Stick to one or two trusted lenders to keep things simple.
Can You Renew a Mortgage in Principle?
Yes, you can renew your mortgage in principle if it expires. The process is similar to the first application. You will need to provide updated financial information, and the lender will reassess your eligibility.
If your circumstances have not changed, renewal is usually quick. However, if your income, credit score, or debts have shifted, the new MIP might look different.
To make renewal easier, keep your documents ready, like payslips, bank statements, and proof of identity.
Also, check your credit report beforehand to spot any issues that could affect the lender’s decision.
FAQs About How Long Does a Mortgage in Principle Last
Q. Can I get a mortgage in principle with bad credit?
Yes, but it depends on the lender. Some specialize in helping people with lower credit scores. A mortgage broker can guide you to the right options.
Q. Does a mortgage in principle guarantee a mortgage?
No, it is not a guarantee. It is a preliminary approval based on basic information. The final mortgage offer depends on a full application and property valuation.
Q. How many times can I renew my mortgage in principle?
There is no strict limit, but each renewal involves a new credit check and updated documents. Try to find a property within the first or second MIP to avoid repeated applications.
Conclusion
A mortgage in principle is a key step in your home-buying journey. Knowing how long it lasts, typically 60 to 90 days, helps you plan your house hunt effectively.
By starting early, keeping your finances stable, and working with a trusted lender or broker, you can make the most of your MIP.
If it expires, renewing is usually simple, but staying proactive is the best approach. With this guide, you are ready to take on the housing market with confidence.
Disclaimer: This blog is for informational purposes only and should not be considered financial advice. Always consult a qualified mortgage advisor or lender for personalized guidance before making financial decisions.
Anurag is a passionate researcher and writer who enjoys exploring diverse topics and sharing valuable insights through his blogs. With a strong interest in personal finance and automobiles, he simplifies complex ideas into easy-to-understand content for readers of all backgrounds.
