A survey by Barratt Homes found that one in three prospective homebuyers don’t fully understand what a mortgage in principle entails, despite its benefits in a competitive market.
Analysing recent Google search data revealed that spring was the peak period for home searches, with over 5.8 million searches from 2021 to 2025.
Terry Higgins, group managing director at TNHG, said: “A mortgage in principle, or agreement in principle, is an estimate from a lender of how much they might lend you based on basic details like your income, expenses, and credit history.
“It’s not a guaranteed offer like full mortgage approval, which requires a deeper look at your finances and the property you want to buy.
“Since every situation is different, it’s important to speak with a mortgage adviser early to understand your options.”
The survey revealed that two-thirds of buyers felt having a mortgage in principle made them more appealing to sellers.
Higgins said: “Getting a mortgage in principle is an essential first step as it helps you understand your budget before viewing properties.
“It can prevent the disappointment of looking at homes beyond your financial reach and flag any potential issues with your credit.
“It also shows sellers you’re a serious buyer.”
Despite some confusion with the process, understanding a mortgage in principle is vital for buyer credibility.
Higgins added: “Having a mortgage in principle boosts your credibility with estate agents and sellers.
“It shows you’ve passed initial financial checks, are serious about buying, and have a clear budget.
“This is especially helpful with new build developers, who often need proof you can move forward before reserving a property.”
The survey also found that 58% of buyers believed obtaining a mortgage in principle before house hunting was significant.
Higgins said: “Getting a mortgage in principle is usually quick—once you provide the lender with the required information, it can take just minutes.
“These agreements typically stay valid for 60 to 90 days, though this varies by lender.
“Keep in mind that circumstances can change during this time, which might impact your final application.”
Common mistakes include not reviewing credit reports, applying for multiple mortgages in principle without advice, and lacking necessary documents.
Higgins said: “Common mistakes include not checking your credit report first, applying for multiple mortgages in principle without guidance (which can hurt your credit score), and not having the right documents ready.
“Another common error is not being fully honest about your finances. Every buyer’s situation is different, so it’s always best to get personalised advice from a mortgage specialist.”
He added: “Preparation is key to securing a mortgage in principle. Start by reviewing your credit report, gathering documents like proof of income and bank statements, and understanding your regular expenses.
“Requirements can vary, so it’s a good idea to speak with a mortgage specialist early on.
“They can guide you on what’s needed and help you submit a strong application.”
