If you’re thinking about buying a home, you’ve probably heard the term Decision in Principle (DIP). It might sound technical, but it’s actually one of the simplest — and smartest — first steps in the mortgage process.

Before you start booking viewings or making offers, here’s what you need to know.

What Is a Decision in Principle?

A Decision in Principle (also known as an Agreement in Principle or Mortgage in Principle) is an early indication from a lender of how much they might be willing to lend you.

It’s based on basic information such as:

• Your income
• Your regular outgoings
• Your employment status
• A credit check (usually a soft search)

It isn’t a mortgage offer, and it isn’t legally binding. Think of it as a lender saying, “Based on what we can see so far, this is what you could borrow.”

Why Is a DIP Important?

It Helps You Understand Your Budget

There’s no point falling in love with a property that’s out of reach. A DIP gives you a realistic borrowing range, so you can search with confidence and focus on homes within your price bracket.

Estate Agents Often Expect It

Many estate agents will ask if you have a Decision in Principle before arranging viewings or putting forward an offer. It shows you’re serious and financially prepared.

It Strengthens Your Offer

In competitive markets, sellers want reassurance that buyers can actually proceed. Having a DIP in place makes your offer look more credible and reduces uncertainty.

Does It Affect Your Credit Score?

In most cases, lenders use a soft credit check at the DIP stage. This won’t affect your credit score and isn’t visible to other lenders.

However, policies can vary, so it’s always worth checking. When arranged through a broker, this is something we confirm for you upfront.

How Long Does a Decision in Principle Last?

Typically, a DIP is valid for between 30 and 90 days, depending on the lender.

If it expires before you find a property, it can usually be refreshed — although you may need to update your details if your circumstances have changed.

Is a DIP a Guarantee?

No — and this is important.

Once you’ve had an offer accepted on a property, you’ll need to submit a full mortgage application. At that stage, the lender will:

• Carry out a hard credit search
• Review supporting documents (payslips, bank statements, accounts if self-employed)
• Arrange a valuation of the property

Your final mortgage offer can differ from your DIP if your circumstances change or the lender’s assessment highlights something new.

Should You Go Direct to a Bank or Use a Broker?

You can apply for a Decision in Principle directly with a bank or building society, often online in minutes.

However, speaking to a broker means:

• You can compare multiple lenders
• You reduce the risk of approaching a lender that may decline
• You receive guidance tailored to your circumstances
• You understand how much you should borrow — not just how much you can

This can be especially helpful if you’re self-employed, have variable income, a complex situation, or previous credit issues.

The Bottom Line

A Decision in Principle is a simple but powerful step. It gives clarity, strengthens your position as a buyer, and helps you move quickly when the right property comes along.

If you’re thinking about buying — whether you’re a first-time buyer, moving home or remortgaging — Impact Specialist Finance can help you secure your Decision in Principle and guide you through the next steps with clear, straightforward advice.

Call 01403 272625 to get started or get in touch to speak with one of our advisers today.