Can you get more than one decision in principle?

In this brief guide we answer the question “can you get more than one decision in principle”.

Can you get more than one decision in principle?

Yes, you can get more than one decision in principle but it may not be advisable to do so due to the fact that applying for more than one or many decision in principle letters from different mortgage lenders may damage your credit score.

This is because when you apply for multiple credit offers (which a mortgage in principle is, in theory) this could appear to the credit bureau as if you are desperate to get credit and hence the credit bureau will reduce your credit score to indicate that you are now less creditworthy.

Applying for more than one decision in principle could also mean that you increase the likelihood of getting rejected. Getting rejected for credit will also damage your credit score and make it much harder for you to get credit in the future.

Having more than one decision in principle could also affect a mortgage lenders decision to lend to you as they may feel you were desperate to get a mortgage and question why.

You may be able to get a mortgage lender to remove the decision in principle searches on your credit file if they appear publicly to others but there is no guarantee that a mortgage lender will do this.

A decision in principle mortgage check is usually carried out with a soft credit check which is only visible to you.

This means that although you can get more than one decision in principle, you may prefer not to do so but if you are confused or unsure then you should consider seeking independent financial advice from a mortgage broker.

Advantages of getting more than one decision in principle

• May save time
• May provide you with more mortgage options

Disadvantages of getting more than  one decision in principle

• May damage credit score
• May affect your ability to get a mortgage

Why is a decision in principle important?

A decision in principle is important as it proves to home sellers and estate agents that you are indeed a serious buyer.

A decision in principle is also important as it gives you an initial indication on whether a mortgage lender may be willing to lend you and the maximum they may be willing to lend you.

Use a Government scheme

Government schemes help you reduce the amount of mortgage deposit you may need to put down, reduce the price of the property or create a structure that increases your mortgage affordability much sooner than it would have been.

Some of these include first-time buyer government schemes whilst others in this list are accessible to you even if you are not a first-time buyer.

Government schemes are not available to you if you are getting a buy to let mortgage.

The Government schemes include:

• Lifetime ISA– gives you a government bonus of £1,000 if you save a maximum £4,000 a year.
• Help to buy ISA– gives a maximum bonus us £3,000 if you save the maximum allowed of £12,000. Before you get either you should consider which is better. Lifetime ISA vs Help to buy ISA.
• Help to buy equity loan– gives you up to 40% as a 5-year interest-free equity loan. You begin to pay interest at 1.75 % after the fifth year and 1% plus RPI for every year thereafter.
• Shared ownership– You can buy between 25% to 75% of the property initially with a shared ownership mortgage and then buy more using a staircasing mortgage.
• Armed forces help to buy– similar to the help to buy equity loan but specific for the armed forces personnel giving them an increased chance of acceptance.
• Rent to buy– This is the right to buy scheme on which this guide is currently discussing. A different marketing name is just used. Watch out for this when shopping to avoid missing out on eligible properties due to confusion.
• Right to buy– allows you to buy your home at a discount price.
• Preserved right to buy– same as above.
• Right to acquire– similar to the above.

Depending on where you live, you may also be able to take advantage of home buying schemes provided by your local council. Example: In Norwich, the local councils provide the Norwich home options scheme.

Use a mortgage broker for your mortgage in principle

You may want to use an independent mortgage broker to help you get a mortgage on your new home.

Mortgage brokers are important as they can access mortgage products from across the whole of the market in some cases.

This could be over 11,000 mortgage products. This may have some advantages rather than going directly to a mortgage lender.

A mortgage broker will look to understand your financial circumstances and then provide recommendations on which mortgage products may be suitable for you based on your mortgage affordability.

After giving you these mortgage recommendations, most mortgage brokers will seek your consent to apply for a mortgage in principle. 

This will allow you to shop for your home as more estate agents and sellers may take you seriously and it will also give you confidence that your mortgage is indeed a possibility before you make a full mortgage application. 

Once you have found a home you want to buy and are satisfied with the mortgage offer for your mortgage then the mortgage broker will then look to get you a mortgage offer.

This will come with a key facts illustration document that details the features of your mortgage including how much you will pay per month.

It will also contain information on if there are any limits such as early repayment fees, or annual overpayment limits.

If you are happy with everything you can then go on to secure your mortgage with the help of a conveyancer.

Your conveyancer will manage the legal searches on the property to ensure there aren’t any issues with it.

They will oversee the sales agreement to ensure it is in your best interest, they will manage the transfer of mortgage funds, exchange contracts with the seller or their conveyancer, and set a completion date with the seller or their conveyancer.

This will then bring an end to the conveyancing process, at which point you will receive the keys to the house and move in.

In this brief guide we answer the question “can you get more than one decision in principle”.

If you have any questions or comments please let us know.

If you need financial advice and you live in the UK then you could contact the Money Advice service over the phone or via chat for impartial advice.

You can also contact the debt charity “Step Change” if you are in debt and need help.