What is an ‘Agreement in Principle'?
Simply put, an Agreement in Principle, sometimes written just as AIP and also referred to as a ‘or ‘decision in principle’ or ‘mortgage in principle’, is a written estimate from the lender outlining how much you can borrow.
A lender or Mortgage Adviser will go through you situation and take some details from you to see what you can afford, they will then supply you with an AIP which outlines how much you will be able to borrow meaning that you can start looking for your next home.
Some estate agents or sellers will like to know that you have an agreement in principle before you view or put an offer in on a property as it gives them the peace of mind that you are able to afford it and this won’t affect the sale.
It isn’t a mortgage offer though. Once you’ve found the property you want to buy and have had an offer accepted you will still need to make a full application for the mortgage. Our Mortgage Advisers will use the information that you already provided to supply the AIP for the full application, as long as the details are still correct.
An AIP doesn’t guarantee that you would be accepted to borrow that amount. If you have had a change in circumstances, for example you now have a smaller deposit or you have changed jobs this could affect your full application.
Something to be aware of is that getting an AIP could impact your credit sore. A credit check will have to be run in order to complete the AIP. If a ‘hard check’ is run then it will leave what we call a ‘footprint’ on your credit record. This means that if you apply for several AIPs within a short period of time this could negatively affect your credit rating. However, some lenders and advisers will use a ‘soft credit check’ so it’s important to find out which one is happening.
So, you want to get an AIP and you’re wondering what’s next? The first step is to speak to one of our advisers where we will get to know you and your situation. Take a look to see what you need for a mortgage appointment and what to expect so you’re prepared. Getting an agreement in principle usually doesn’t take that long and our advisers will always look to get back to you within 24 hours with an update on your AIP.
We are also able to provide a Mortgage Certificate, although this is not always accepted by some estate agents as it is not provided directly by a lender, but one of our advisers.
We do not charge for our advice, or getting you an AIP, but we do normally charge a fee for processing your mortgage application. However, during these uncertain times we have decided to waive our normal fee to process remortgages and offer this service free of charge.* We are also removing our mortgage application processing fee* for all Key Workers, to show our thanks for all the hard work they are doing. For more information on this offer see here.
If you’re interested in speaking to an adviser or getting an agreement in principle then speak to one of our Mortgage Advisers on 0117 2050240.