What is a decision in principle (DIP)?
Also known as an agreement in principle (AIP), a mortgage promise or a mortgage in principle. A decision in principle or DIP for short, is a certificate or statement that gives you an indication of how much you can borrow.
Why get a decision in principle?
Getting a decision in principle basically shows both you and estate agents a clear budget amount when you begin property hunting. Many estate agents insist on you presenting a decision in principle as it proves you’re a serious buyer.
How long does a decision in principle last for?
Ultimately this is dependent on your mortgage lender, but typically a decision in principle can last between 60 – 90 days.
Will a decision in principle affect my credit score?
Fortunately, applying for a decision in principle will not affect your credit score. Unlike a full mortgage application, a decision in principle utilises a soft credit check, which doesn’t affect your credit score due to only requiring certain details from credit reference agencies.
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Decision in principle checklist – Information you’ll need to know when applying
Your income:
- Proof of income, salary, payslips or bank statements
- If self employed, provide last 2 years of accounts
Your outgoings:
- Any loans
- Credit Cards
- Monthly spending
- Any existing mortgage payments
Additional information:
- Proof of identity via passport or drivers license
- Proof of current address