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The first step toward "yes"

Decision in principle

Buying a home is one of the most exciting things you will ever do. It is also one of the biggest financial commitments you will ever make.

If you’re at the start of your journey, you might be feeling a mix of excitement and nerves. You’re probably scrolling through property apps on your phone. You might be wondering which houses are actually in your price range. You might even be worrying about whether a lender will say "yes" to you.

This is exactly where a decision in principle helps.

It is a simple document. But it is also a powerful tool. It turns "I hope I can buy a house" into "I know I can make an offer". It gives you a clear budget and proves to sellers that you’re serious.

What actually is a decision in principle?

In simple terms, a decision in principle is a certificate or statement from a lender.

It says that, in theory, they would be willing to lend you a specific amount of money to buy a property. It is based on a quick check of your income and your credit file.

It is not a formal mortgage offer. You don’t get that until you have found a specific property and the lender has done a full valuation. But it is the very first "green light" on your journey. It tells you that a lender likes the look of your finances.

What else is a decision in principle called?

One of the most confusing things about buying a house is the jargon. Different lenders and estate agents use different names for the exact same thing. If you hear any of these terms, don’t worry. They all mean a decision in principle:

Agreement in principle (AIP).
Decision in principle (DIP).
Mortgage promise.
Mortgage in principle.
Approval in principle.

They are all just different labels for the same certificate. They all serve the same purpose: to show you can afford to buy.

Why you should get a DIP before you view

You technically can view houses without one. But having a decision in principle ready to go can put you in a stronger position.

Here are the main reasons to get one sorted early:

It helps you build a realistic budget: there is no point falling in love with a large, detached house if your budget is for a terrace for example. A decision in principle gives you a solid figure. This means you can filter your property search. You can focus your energy on the homes you can afford to buy.

To help you get an early estimate, check out our mortgage affordability calculator. It will give you a clear idea of how much you could borrow before you even speak to a broker. This helps you start your house search with confidence.

2. It proves you’re a serious buyer: estate agents want to know you’re ready to go. If you want to view a popular property, an agent will often ask if you have a decision in principle. Showing them you have one proves you’re not just window shopping. It puts you at the front of the queue.

3. It gives you confidence to offer: making an offer on a house is nerve-wracking. When you have your certificate, you can make that offer with confidence. You know the money should be there when you need it.

How does the check work?

We know that financial checks can make people nervous. It helps to know exactly what is happening behind the scenes.

When you apply for a decision in principle, a lender or broker needs to check two main things:

Affordability: do you earn enough to pay back the loan?
Creditworthiness: have you managed your debts well in the past?

To do this, they look at your income and your outgoings. They also look at your credit history.

Soft checks vs hard checks

This is the number one thing people worry about. Most lenders use a "soft" credit check for a decision in principle. This means they can see your file, but other lenders can’t. It doesn’t leave a mark that affects your score. You can shop around without damaging your chances.

However, some lenders might do a "hard" check. This leaves a footprint on your file. If you’re using a mortgage broker, they will be able to tell you which type of check a lender uses before you apply.

What you need to apply

You don’t usually need to dig out every single bank statement from the last five years just yet. The initial process is usually quite simple.

To get your decision in principle, you will usually need to provide:

Address history: where you have lived for the last three years.
Income details: how much you earn from your job or self-employment.
Outgoings: regular payments like credit cards, loans or childcare costs.

That is usually enough to get the ball rolling.

Understanding your deposit

Your deposit is the money you put down towards the property purchase. The bigger your deposit, the smaller the mortgage you need.

Before you apply for your decision in principle, you need to know how much cash you have saved up. The amount of your deposit affects the range of mortgages available to you.

If you’re not sure how much deposit you need for the house you want, try our deposit calculator to give you a first glance.

How long is a decision in principle valid for?

House hunting takes time. You might find the perfect place next week. Or it might take three months.

Most decisions in principle are valid for between 30 and 90 days. If yours runs out before you find a home, don’t panic. You can usually get it refreshed. You will just need to confirm that your details haven’t changed.

Who can help me get a decision in principle?

You can go to a lender directly. But there are thousands of mortgage deals out there. Going to one lender can sometimes mean you only see their products.

Many people choose to use a mortgage broker instead. A broker can look at the whole market for you. They can find a lender that suits your specific situation. This is especially helpful if:

You’re self-employed.
You have a complex income. This just means your money doesn't arrive in one neat, regular monthly salary. For example, your income might vary from month to month (like commission or bonuses) or it might come from several different places rather than one single employer.
You’re a first-time buyer.
You have a unique situation such as being a non-UK resident or returning expat.

Frequently asked questions

Can I include my bonus or overtime?

Yes, you often can. When you verify your income, mention regular bonuses or overtime. Lenders look at this differently. Some will include 100% of it, others might include 50%. A broker can help you find a lender that will take your full income into account.

Do I have to use the estate agent’s broker?

No. You absolutely do not.

Estate agents will often suggest you speak to their in-house broker. They might even imply that it will help your offer. But you’re free to choose your own advice. You can get your decision in principle from any broker or lender you like.

Does a decision in principle guarantee I’ll get the mortgage?

Not 100%, no. It is a very strong indicator, but it isn’t a legal promise.

A lender could still say no later if your circumstances change. For example, if you lose your job or take out a new loan. It can also happen if there is a problem with the property itself, like if it is made of unusual materials. But provided your details stay the same, a decision in principle is a reliable green light.

Does it cost anything?

Getting the certificate itself is usually valid "on us" (free). Some brokers might charge a fee for their advice later in the process. They will always tell you about any fees upfront.

I’m self-employed. Is it harder for me?

Not necessarily harder, just different. You can definitely get a decision in principle if you work for yourself. You will just need to prove your income differently. Instead of payslips, lenders will look at your tax calculations or accounts. A broker can be really helpful here, as they know which lenders are best for self-employed people.

Is the amount accurate?

It is as accurate as the information you give.

If you guess your income or forget to mention a credit card debt, the figure won’t be right. If you’re honest with your numbers, the Decision-in-principle will be very accurate.

What happens if I get rejected?

First of all, don’t panic.

A rejection now is better than a rejection later. It usually means there is something on your credit file or an affordability issue. If this happens, a broker can help you check your credit report for errors. They can also help you find lenders who specialise in helping people with complex credit histories.

What if I have a small deposit?

You don’t always need a huge pile of cash. There are mortgages out there for all sorts of deposit sizes.

If you’re a first-time buyer, you might be able to buy with a smaller deposit than you think. Getting a decision in principle is the best way to find out exactly what your deposit can get you.

We work with Mortgage Advice Bureau

At Nottingham Building Society, we want to help you find the right mortgage for your life. That is why we work with Mortgage Advice Bureau.

They are a leading mortgage network. They have access to over 12,000 mortgages from more than 90 lenders. They can look at your needs and help you get a decision in principle that works for you. They can handle the paperwork, explain the jargon, and be in your corner from the first search to the day you get your keys.

Ready to see how much you could borrow? You can chat with an expert adviser at Mortgage Advice Bureau today.

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