In this brief guide, we are going to answer the question “Does mortgage in principle affect credit rating?”.
Does mortgage in principle affect credit rating?
Yes, a mortgage in principle could affect your credit rating but this will usually only be the case if you have made multiple mortgage in principle applications and the mortgage lender is carrying out a hard credit search for its mortgage in principle checks.
Most mortgage in principle checks will not affect your credit rating as they are done via soft credit checks which only you can see.
With a soft credit check, the mortgage lender simply asks the credit bureau to confirm certain details on your credit report with the information you have submitted on your mortgage in principle application.
Use a mortgage broker to get your mortgage in principle
You may want to consider using an independent mortgage broker to get a mortgage.
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 easier as more estate agents and sellers may take you seriously or it will 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 which details out 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.
In this brief guide, we answered the question “Does mortgage in principle affect credit rating?”.