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Mortgage Ready

Understand how mortgages work, speak to an adviser and get an Agreement in Principle.

What is it?

This stage prepares you to borrow. You learn the language of mortgages, speak to an authorised mortgage adviser or lender and usually obtain an Agreement in Principle (AIP).

Why does it matter?

Estate agents often ask for an AIP before taking your offer seriously. It also tells you roughly how much you may be able to borrow, so you search at the right price.

What do I need to do?

  1. 1Learn the key terms: AIP, LTV, fixed rate, term, product fee.
  2. 2Decide whether to use a mortgage broker or go to a lender directly.
  3. 3Check any adviser on the FCA Register.
  4. 4Prepare the information an adviser normally asks for.
  5. 5Obtain an Agreement in Principle.
  6. 6Note the date your AIP expires.
Get mortgage ready Calculate Mortgage & LTV
We do not provide regulated mortgage advice. Where advice is needed, speak to an appropriately authorised mortgage adviser. We can help you understand the process and prepare.

Key terms explained

Mortgage
A loan to buy property, secured on that property. If repayments are not made, the lender can ultimately repossess the home.
Agreement in Principle (AIP)
A preliminary indication of how much a lender may be willing to lend based on the information available at that stage. It is not the same as a final mortgage offer.
Decision in Principle (DIP)
Another name for an AIP. Some lenders also call it a Mortgage in Principle (MIP).
Borrowing capacity
Lenders look at income, outgoings, credit history and deposit. Online figures are only rough guides.
Mortgage broker / adviser
A professional who compares mortgages and recommends one suitable for you. They must be authorised by the Financial Conduct Authority (FCA). Some charge a fee.
Lender
The bank or building society that actually lends the money and makes the final decision.
Mortgage application
The full application, usually made after your offer on a property is accepted, with documents and property details.
Mortgage valuation
The lender's check that the property is worth enough to lend against. It is for the lender, not a survey for you.
Mortgage offer
The lender's formal offer to lend on a specific property, with conditions. It has an expiry date.

Your checklist for this stage

Tick items as you go. Your progress is saved on this device only.

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What happens next?

With an AIP and a realistic budget, you can start searching and viewing properties with confidence.

Related guides

This is general information, not mortgage advice. We are not authorised to recommend mortgages. Speak to an FCA-authorised mortgage adviser about your circumstances.