Getting a Decision in Principle

Are you ready to start applying for a mortgage? First, you’ll need a Decision in Principle (sometimes called an Agreement in Principle or Mortgage in Principle).

A Decision in Principle is an indication from your mortgage lender of how much you could borrow to buy a property before you start a full mortgage application.

Agreement in Principle FAQs

What is a Decision in Principle?

A Decision in Principle (DIP), is a statement from your lender of how much they could lend you based on basic information such as your salary, how much you’d like to borrow and your monthly outgoings.

Getting a Decision in Principle can make you a more attractive buyer, as it shows the seller and estate agent that you’re serious about buying.

What's the difference between an agreement in principle and a decision in principle?

An Agreement in Principle (AIP) and a Decision in Principle (DIP) will both give you an idea of how much you could borrow before you start applying for a mortgage. Some lenders just use different wording for the same process.

An Agreement in Principle and Decision in Principle both give you an indication of how much a lender is prepared to lend you, a mortgage offer is an official document that confirms how much a lender will lend you for a specific property.

The mortgage offer is only provided after you have completed a full mortgage application.

Does a Decision in Principle guarantee a mortgage?

No, a Decision in Principle does not guarantee a mortgage. This is because the lender does not have a full view of your financial situation. For this reason, getting an agreement doesn’t guarantee a mortgage nor does it make any guarantees about the amount you’re able to borrow.

Before you apply for a Decision in Principle you can use our mortgage affordability calculator to get an idea of how much you may be able to borrow from us.

Are you ready to start your mortgage journey?

Book an appointment with our mortgage advisers to discuss your affordability and get a decision in principle.

Get a Decision in Principle

How long does it take to get a Decision in Principle?

You can usually get a Decision in Principle within 24 hours, but this can vary depending on your lender. At Newcastle Building Society our mortgage advisers will usually be able to give you a decision in less than 45 minutes if you have all the information at hand that is needed.

How long is a Decision in Principle valid?

A Decision in Principle is typically valid for up to 90 days. If it goes beyond this date before you need it, you can always re-apply. However, it may be best to avoid this to stop too many credit searches damaging your credit score.

Does an Decision in Principle affect my credit score?

A Decision in Principle can affect your credit score, but not always. 

At Newcastle Building Society we carry out a soft search credit check for Decisions in Principle, which shows as an enquiry on your credit file.

You may want to check with your lender before applying for a Decision in Principle, to see what kind of search they’re going to carry out. Having a lot of applications for credit on your file can put lenders off, as it may seem you find it hard to pay back your loans.

At what point should I get an Decision in Principle?

A Decision in Principle lets you know how much you could potentially borrow, therefore it will give you an idea on how much you could spend on a new home. The Decision in Principle will help you to search within a suitable price bracket, so the earlier the better.

Can I get an Decision in Principle if I've had financial issues in the past?

You might still be able to get a Decision in Principle if you’ve had financial issues in the past. Depending on your personal situation you might need speak to a member of our mortgage team before we can offer you a Decision in Principle.

You can view our lending policy for more information on the different factors that could affect your ability to get a mortgage.

What do I need to provide for an Decision in Principle?

During the Decision in Principle appointment, we will run an affordability assessment based on your current income and outgoings. Therefore, you need to have to hand all of your income/outgoings for the appointment.

What are the benefits of having an Decision in Principle?

Having a Decision in Principle helps to strengthen your position when trying to buy a property as it shows the sellers and/or estate agents that you are able to afford the property you’re interested in.

Can a mortgage offer be declined even after an Decision in Principle?

Yes, a Decision in Principle is an initial decision by lenders and doesn’t guarantee that your mortgage offer will be accepted. This is usually because additional checks have taken place and information is discovered during the formal mortgage application process, which has resulted in your mortgage off being declined. 

Are you ready to start your mortgage application with us?

Tell us about your mortgage needs and arrange an appointment with a mortgage adviser to discuss how you could achieve them.

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