What is an Agreement in principle (AIP)?
Also sometimes referred to as a Decision in Principle (DIP) or even a Mortgage in Principle (MIP). An agreement in principle is an initial indication that a lender may be willing to provide you a mortgage based on the information you have provided and your personal circumstances.
It does not commit you to taking out a mortgage with a lender but by applying for an AIP you will know how much you could potentially borrow subject to a full application which is the next stage.
An AIP is usually more accurate than an online mortgage calculator and can help you understand how much you can borrow when you are looking for a property. Contact us today if you need to secure an Agreement in principle for your property purchase.
When your full application then goes to the lender, the information you provide will allow the Lender to check your credit profile. this will help the lender decide if they can offer you a mortgage and the requested finance amount.
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FAQs
An AIP will show an estate agent that you will be able to get a mortgage and pay the monthly repayments, on top of your deposit.
It will show you’re a serious buyer and put you in a good position to make an offer that the seller is more likely to accept. It will also help you stand out from other buyers who do not have a AIP.
An agreement in principle online cannot be used as a guarantee that you’ll be able to borrow that amount, but it gives the estate agent some confidence that you can afford the property you are looking to purchase. You will need to complete a full application and have your advisor check your earnings and credit history before you get a mortgage.
It still gives you a good idea of what you could borrow and it will show estate agents that you are serious about buying a home.
Depending on the number of applicants and your personal situation it shouldn’t take much longer than 30 minutes.
Before you start it is a good idea to have the following information to hand to save time, Income details, Address history, Committed Expenditure ie Loans, Car finance, other outgoings such as current mortgage payments, child care etc.
An Agreement in Principle (AIP) is typically valid for between 30 to 90 days. With an AIP in place you have the added confidence when speaking to estate agents in your property search. Although an AIP cannot be used as a guarantee for a mortgage, however it does demonstrate to your estate agent that you have done some background work towards getting a mortgage in place.
Absolutely! At Morfinity, we’re here to help you secure an Agreement in Principle for your mortgage. This preliminary assessment gives you an idea of how much you could borrow, aiding your home search. Contact us to start the process with our expert advisors in Birmingham.
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