Mortgage Decisions in Principle - are they Meaningful ?
Only 3.5% of people using online mortgage pre-qualification tools (Decision in Principle) finally get the mortgage that was agreed during pre-qualification when it comes to fully applying for a mortgage…
The Problem with a Mortgage Decision in Principle
According to research data from Experian, providers of the “UK’s most trusted Credit Score free for ever”, a staggering 33% of mortgages get rejected by mortgage lenders, because they don’t meet lending criteria.
The research also showed that just 22% of mortgage customers, using a decision in principle comparison website, met the initial qualifying criteria for every lender on the market.
Worse still, when finally applying for a previously agreed pre-qualified mortgage only 3.5% are successful in getting their chosen loan, after the lender completed an eligibility check…
So, the problem appears to be getting the right decision in principle. It’s easy to get a decision online. But sadly, 96.5% of the time it ends up in failure to pass the lenders final mortgage checks when fully applying.
How to improve your mortgage decision pass success
Perhaps the best way to avoid potential disappointment is to get the help of a professional, such as a mortgage broker, before getting a decision in principle.
Understanding mortgage lender criteria has become a bit of a science, it’s not straight forward. Different mortgage lenders have different rules.
Furthermore, lenders look at your income in different ways. What’s acceptable income to some lenders is un-acceptable income to others. Similarly, differences between lenders even apply to the type of property you’re looking to buy, or length of mortgage, and the list doesn’t end there.
How to get a meaningful Mortgage Decision in Principle
All said and done, the advantage of getting a decision in principle is clear. But in the long run, pre-approval is only going to help if you’ve been pre-qualified for a mortgage that ultimately, you’ll be sure to get.
A decision in principle is no good to anyone, if you only find that on full application you’re rejected, simply because criteria or affordability has been failed…