What Documents Are Needed for a Mortgage in Principle?

It’s no surprise that buying a home involves a lot of different paperwork, but most people don’t start by compiling all the documents they need for their mortgage. Instead, we start by asking one simple question: “How much could I borrow?”

This is where a mortgage in principle (also referred to as an agreement in principle or decision in principle) can make a world of difference.

Before you even begin viewing properties or making serious offers on your potential dream home, a mortgage in principle can provide a clearer idea of exactly what your budget is and help you narrow down the seemingly never-ending list of properties to your personal top contenders.

But what documents do I need for a mortgage in principle in the UK?

In this article, we explain all the documents needed for a mortgage in principle, what lenders will request to see before issuing a decision, and how a mortgage in principle in the UK will help you find your perfect home. Let’s begin.

What Income Documents Are Required for a Mortgage in Principle?

As an MIP is an agreement only in principle and not an official mortgage offer, lenders will not usually require supporting documents at this stage. Instead, you are simply asked to provide details about your total income and financial commitments.

It’s important that all information provided is as accurate as possible as this information will then be verified later if you proceed with a full mortgage application. If any of the details provided are incorrect, or your verified income is lower than originally declared, the amount you are able to borrow could change. In some cases, a lender may decline the mortgage application if the revised information no longer meets their affordability criteria.

With that said, working with a mortgage broker can change this process slightly. Because mortgage brokers will want to recommend the most appropriate lender that matches your specific case, a broker will often review your income documents to confirm the information provided is accurate and that the lender selected is suitable for your circumstances.

Because of this, the exact income documents for a mortgage in principle can vary depending on how you apply. As a general rule, lenders rely on declared income at the mortgage in principle stage, while mortgage brokers will often request document checks upfront to help avoid complications later in the mortgage process.

Employed Applicants

For employed applicants, these documents can include:

• Your latest three payslips
• Your most recent P60
• Details of your employer and job role
• Evidence of bonuses, commission or overtime, where applicable

Self-Employed Applicants

Alternatively, if you’re self-employed, the required documentation may vary between lenders, but will commonly include:

• SA302 tax calculations
• Tax year overviews
• Accountant-prepared accounts
• Details of salary and dividends if you operate through a limited company

Although many of these documents are not formally required until the full mortgage application stage, having them prepared early on can help ensure the figures provided are accurate, reducing the risk of delays later in the process.

What Documents Do You Need for a Mortgage Agreement in Principle?

Unlike a full mortgage application, a mortgage in principle does not usually require you to submit ID documents, proof of address or supporting financial documents. Instead, lenders will typically ask for key information about your identity, address history, income and financial commitments before carrying out a soft credit check.

As we’ve touched on before, this information can then be used by the lender to build an initial picture of your current financial circumstances and to estimate how much you may be able to borrow. It is only when a full mortgage application is submitted that all the the information provided during your MIP application is verified using supporting documentation

With that said, some documentation may still be requested earlier in the process, particularly if you are working with a mortgage broker or your circumstances require additional verification.

To help you understand what information lenders need for a mortgage in principle, we’ve created a table below that provides an overview of all the key information that can be requested during a mortgage in principle application, along with examples of the documents that may later be used to verify it:

In addition to the information above, it’s important to note that lenders will also usually carry out a credit search as a standard part of the MIP application process. This is commonly referred to as a “soft credit search”, meaning the check will not affect your current credit score.

If you later decide to proceed with a full mortgage application, a hard credit search is often then carried out by your chosen lender as part of their final assessment.

How Accurate Does Your Information Need to Be for a Mortgage in Principle?

When applying for a mortgage in principle, the information you provide should be as accurate as possible to reflect your genuine financial position.

This is because a mortgage in principle is only ever as accurate as the information it is based on. If incorrect figures are provided, you may receive a borrowing estimate that doesn’t match what you can realistically afford or what a lender is ultimately willing to offer.

Incorrect information on a mortgage in principle application could lead to:

• Receiving a borrowing estimate that does not accurately reflect your true financial position
• Delays during a full mortgage application when lenders request additional information to verify your identity, address, and income history
• Either a reduction in the amount you can borrow or a mortgage rejection once your income and financial commitments are fully reviewed during the mortgage application assessment

The impact of incorrect details on an MIP often becomes a problem when your chosen lender begins verifying the information originally provided. In cases where the information originally provided does not match the supporting evidence later submitted, the lender may determine that you cannot borrow as much as initially indicated.

For this reason, it is always better to provide realistic figures from the start, rather than relying on rough estimates. A slightly lower borrowing estimate based on accurate information is often far more useful than an inflated figure that may not be achievable when you come to submit a full mortgage application.

What Happens After You Receive a Mortgage in Principle?

After you receive a mortgage in principle, you can use your estimated borrowing amount as a guide for your property search, giving you a much clearer idea of which properties are likely to be within your budget.

In addition to this, an MIP can also be used to show estate agents that you are a serious buyer who has already taken the first step towards securing a mortgage.

With that said, the next steps after securing a mortgage in principle will usually depend on where you are in the buying process. For most people, the journey after receiving an MIP will look something like this:

1. Use your mortgage in principle to guide your property search
2. View suitable properties within your estimated budget
3. Make an offer on a property
4. Have your offer accepted
5. Submit a full mortgage application
6. Provide the documents requested by the lender
7. Wait for underwriting checks and the property valuation
8. Receive a formal mortgage offer, if approved

It is important to remember that the move from an MIP to a full mortgage application is where the lender carries out a much more detailed assessment. This is when your income, identity, bank statements, credit commitments and supporting documents will usually be reviewed in full.

Let Our Mortgage Brokers Help You

A mortgage in principle is usually the first milestone in the home-buying journey and the information you provide can play an important role in determining how much you may be able to borrow and which properties are likely to be within your budget.

Understanding what lenders need, preparing for future document checks and ensuring the information provided is accurate can help ensure that the transition from an agreement in principle can move to a full mortgage application without any unnecessary delays.

At Boon Brokers, our fee-free mortgage advisers help buyers understand exactly what lenders are looking for before an application is submitted. Whether you’re employed, self-employed or have more complex income arrangements, we can help you understand your options and prepare for the next stage of the mortgage process.

Boon Brokers can help you:

• Understand what information lenders typically require for a mortgage in principle
• Prepare supporting documents before they are needed
• Identify lenders that best match your circumstances
• Avoid common issues caused by inaccurate or incomplete information
• Understand how affordability may affect your borrowing potential
• Move from a Mortgage in Principle to a full mortgage application with confidence

Whether you’re at the start of your mortgage journey and want to understand how much you could borrow, or need expert advice on which lenders may offer the most suitable mortgage deals for your circumstances, our experienced advisers are here to help.

Contact Boon Brokers and speak with one of our dedicated mortgage experts about your options today.

Want to know more about what comes after the mortgage in principle stage?

Read our complete guide on What Proof of Income Is Needed for a Mortgage to learn how lenders verify income during a full mortgage application and what documents may be required for different employment and income types.