Yes, you can put an offer on a house without a mortgage in principle but you may not find too many home sellers or estate agents who will take you seriously. This is because a mortgage in principle makes you look much more serious to home sellers as it indicates that you have completed the initial stage of the mortgage application process and you could potentially get a mortgage offer from a mortgage lender.

Without a mortgage in principle, you make get overlooked for other home buyers and this could increase the timeline for your home purchase or make it much more difficult to get an offer on a house accepted.

Do you need an agreement in principle to make an offer?

As stated above an agreement in principle is not needed to make an offer but having one when shopping for a house will give you a better chance of getting your offer accepted for a house.

If you make an offer on a house without a mortgage in principle it may be offered but if another potential buyer with an agreement in principle then makes an offer on the same house you may find that your offer will then be rejected by way of gazumping.

What is an agreement in principle?

An agreement in principle is essentially an indication that a mortgage lender is willing to lend to you.

A mortgage lender will briefly run through your application to see if you meet their headline criteria for a mortgage and then provide you with an agreement in principle.

The agreement in principle will usually be valid for between 30 to 90 days and this gives you enough time to put an offer on a house you find.

Before a mortgage lender will give you an agreement in principle they will collect some basic information from you through a mortgage fact find and then do a soft credit check in you to ensure you are creditworthy before agreeing and providing you with an agreement in principle.

An agreement in principle is not a firm offer of a mortgage and you could still get declined after getting an agreementiin principle

Some of the reasons you may be declined after getting an agreement in principle could be:

Your property is found to be overpriced and hence the mortgage lender needs to adjust their loan to value which makes you ineligible for the mortgage product.

You failed the mortgage lenders detailed financial suitability.

You failed a more detailed credit check as more information such as bad credit information was found on your credit file.

Bad credit could include:



A debt management plan

A default

A bankruptcy

A home reposession

Does an agreement in principle affect your credit score?

No, most mortgage lenders will run an agreement in principle application through a soft credit search. This means you will be the only one who is able to see the footprints on your credit file and it shouldn’t affect your credit score.

Some mortgage lenders may run a hard credit search when analysing an agreement in principle application so you should make clear to your mortgage broker that you may prefer a mortgage lender who will soft credit check you when providing an agreement in principle decision.

John Bate

John has 22 years of experience in financial services. This spans across financial research, financial services (As a qualified mortgage broker and underwriter), financial trading and sales at global investment banks. While working as a publishing research analyst, he covered European bank credit and advised institutional clients on investment strategies at both JP Morgan and Societe Generale. John has passed all three levels of the CFA (Chartered Financial Analyst) programme.