A contractor mortgage in principle (MIP) is a specialist lender's conditional offer that correctly assesses daily rate income to determine borrowing capacity. Utilizing a contractor-specific MIP provides credible proof of purchasing power to estate agents, proving that a lender has reviewed the unique income structure.
A mortgage in principle also called an agreement in principle or decision in principle is a document from a specific lender stating that, based on an initial assessment of your income and credit position, they would be prepared to offer you a mortgage up to a stated amount.
It is not a binding offer the lender can change or withdraw it if your full application reveals information that was not included in the initial assessment. But for property searches and offer negotiations, it is the standard evidence that your financing is in place.
A MIP from a lender who does not understand contractor income may understate your borrowing capacity significantly. A MIP from a lender who uses SA302 assessment for a contractor on a £600 per day rate might state a maximum mortgage of £200,000. The same contractor with a MIP from a specialist contractor lender using day rate annualisation might have a MIP stating £550,000 or more.
The choice of lender at MIP stage determines the amount stated on your MIP and therefore the properties you are able to confidently make offers on.
To secure a contractor mortgage in principle, lenders typically require a small number of key documents to assess your income, identity, and contracting history. The exact requirements vary by lender, but most applications can be supported with the following:
Provide a copy of your current contract showing your day rate, contract length, and engagement details. This helps lenders assess your income using contractor-friendly calculations.
A brief overview of your contracting background, including previous contracts and industry experience, helps demonstrate continuity of work and future earning potential.
Most lenders request the latest three months of personal bank statements to verify income receipts, regular commitments, and overall financial conduct.
When a lender carries out a credit check for a MIP, it is either a soft search (which does not appear on your credit file to other lenders) or a hard search (which does, and can affect your credit score).
We always clarify whether a soft or hard search will be performed before submitting a MIP application. Where a soft search MIP is available from a suitable contractor lender, we use that first to protect your credit file.
With the right lender and documentation in place, a contractor MIP can be issued within 24 to 48 hours of receiving your information. In some cases — straightforward income structure, clean credit, digital lenders — same-day decisions are possible.
The speed depends on the lender, the complexity of your income structure, and whether any manual underwriting is required. We manage the process and set realistic expectations.
Once you have your MIP and have had an offer accepted on a property, the next step is the full mortgage application. This requires more detailed documentation and instructs the lender’s valuer to inspect the property.
We manage the full application process, including document submission, liaison with the lender’s underwriting team, and coordination with your solicitor. Most full mortgage offers follow within two to four weeks of the full application being submitted.
Most mortgage in principles are valid for 60 to 90 days, though some lenders extend to six months. If your MIP expires before you find a property, we can reissue it quickly — usually within 24 hours.
A soft search MIP will not affect your credit score. A hard search MIP will leave a trace on your credit file. We use soft search MIPs wherever available and limit hard searches to the most appropriate single lender.
Yes — and this is the recommended approach. Having a MIP in place before you start seriously viewing properties means you can make offers with confidence and demonstrates to agents and vendors that your financing is ready.
No — a MIP is a conditional indication, not a binding offer. However, a MIP from a specialist contractor lender who has reviewed your income structure is a reliable indicator of the mortgage you will be offered.
No — you can get a MIP from one lender and ultimately complete with a different one. We review the full market again when you have a specific property to purchase to ensure the final recommendation is the best available at that point.