Do I need an ‘Agreement in Principle’ (AIP)?

Posted on March 6th, 2016

An Agreement in Principle’ (AIP) or a ‘Decision in Principle’ or a ‘Mortgage in Principle’ are all same. As a mortgage broker we would take information from the applicant and perform a credit search/score with a mortgage lender which determines eligibility and the mortgage loan amount.
An Agreement in Principle factors in loan and deposit size, incomes, outgoings and credit history. Each mortgage lender has its own internal scoring system. In addition the lender will use credit reference agencies such as Experian or Equifax.
Note: A high score with either credit reference agency does not guarantee you an AIP or a mortgage. Mortgage lenders use their own internal scores. With having access to the whole market we would choose the right mortgage lender.

So when is best to apply for an AIP?
The best answer is to seek advice as it depends on circumstances. If you have an offer accepted on a property, you will need to action an AIP and full mortgage application immediately with the right lender. We will research the right mortgage lender for you.
If you’re house hunting, you may not need an AIP so soon, as mortgage rates change weekly and too many credit searches is not advised.
If your credit score is poor, you will need to seek advice and best course of action.
We will guide you through the mortgage process from start to finish and having access to the whole market will help you.

As a mortgage broker we receive many calls asking for Agreement in Principles (AIP) certificates to either send to estate agents as proof of finance or peace of mind before house hunting. TIP: Seek advice initially… Please note every time an AIP is carried out, a footmark is left on the credit file. The mortgage lender will carry either a hard or soft search. This can have impact on your credit score. We offer mortgage appointments in our Manchester city centre office in Piccadilly. We will go through approximate costs, eligibility and carry out Agreement in Principles if need be.