Imagine Sarah, a first-time homebuyer, has found her dream house. Before she can make an offer, she needs to know how much she can borrow. This step, mentioned at 6 minutes and 28 seconds in this YouTube video , is known as obtaining an —sometimes called a "Decision in Principle" or "Mortgage in Principle."

The lender does a quick credit check to see if she is likely to be accepted.

Within a few minutes, the lender gives her a document stating that they are prepared to lend her a specific amount (e.g.,

With this in hand, she can start her formal application and confidently proceed with her solicitor as discussed further in the video.