Need a Mortgage Agreement in Principle?
An Agreement in Principle (AIP) is where you pass a lender’s credit score to qualify for a mortgage. You might also hear it referred to as a Decision in Principle. Once you have your AIP you can go ahead and make an offer on a property and sometimes even help you negotiate a lower asking price. This is because the seller knows you are serious and have the funds to proceed.
Will obtaining an Agreement in Principle affect your Credit Score?
Some Agreements in Principle do affect your Credit Score. However, more lenders are carrying out soft searches. If the lender carries out a soft search, then your score should be unaffected. This is because this type of search doesn’t dig as deeply as a hard search but provides the lender with the information they need.
Should I avoid hard credit checks?
The odd hard search here and there shouldn’t make too much difference. However, if you have several hard searches in a short period of time, this will have an adverse effect on your score. If you know you have a good credit rating and haven’t had any hard searches undertaken recently, then this shouldn’t put you off a lender if they have the best deal.
Is an Agreement in Principle a guarantee that I will get the Mortgage?
No. The AIP should not be thought of as a guarantee. The lender will need to see all your documents before accepting your full mortgage application. Only then will an Underwriter make the final decision.
Agreements in Principle have lots of small print and often clients ring us having been declined at full application stage. To complete the full process, you will need to provide ID to prove who you are, payslips to prove how much you earn and bank statements to prove you conduct your finances.
Can I make an offer without an Agreement in Principle?
You can make an offer without an Agreement in Principle, but we wouldn’t recommend it. Any Estate Agent worth their salt will want you to prove you have the means to proceed.
How Long Does it take to get an Agreement in Principle?
You can obtain an AIP within 24 hours of speaking with a Mortgage Advisor.
How Long Does an Agreement in Principle Last For?
An Agreement in Principle can typically expire after 30-90 days but don’t worry. It’s easy enough to get it refreshed when it expires.
Be careful if you’re AIP is expiring. Just because you have it, that doesn’t mean you have to buy the first house you see! It’s a good idea to get an Agreement in Principle as early as possible because it gives you a better idea of what price range to look at.