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What is a Mortgage Agreement in Principle?
A mortgage Agreement in Principle (AIP) is the first step to getting a mortgage, sometimes called a Mortgage Promise or a Decision in Principle.
Why apply for an Agreement in Principle?
A mortgage Agreement in Principle can speed up the home buying process.
It helps the:
- Seller/estate agent. It gives the seller and estate agent the confidence that you’re serious about buying and can afford the property.
- You, the buyer. The agreement will show what the lender is willing to lend you. This will help guide your property search.
How do I get a mortgage Agreement in Principle?
It’s usually a simple process that you can do with a mortgage provider either online, over the phone or face to face. You should receive a decision within around 15 minutes, depending on your circumstances.
2. Detail your personal information
Income, monthly outgoings and how much you want to borrow. And any addresses you’ve lived at in the last three years.
3. Gather supporting documents
Payslips, bank statements, and rental or mortgage agreements.
4. Your lender does a credit check
We do a soft credit check but other lenders may do hard checks. Soft checks don't affect your credit rating, but hard checks do.
This will assess your financial situation to work out how much you could borrow.
Good to know
You’ll need to apply for a new AIP if your circumstances change. For example, if your income or outgoings change significantly. Or you decide you want to borrow more.
Let’s look at the details
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A lender will run a soft credit check when processing your AIP application. This shouldn’t affect your score and won’t be seen by other lenders. Please check with your lender before applying for an AIP if they run a soft or hard check.
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A mortgage Agreement in Principle usually lasts for between 60 and 90 days – plenty of time to view some properties and find your perfect home.
If an AIP expires, don’t worry. You can re-apply with the same lender or a different one.
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If a lender refuses your mortgage Agreement in Principle, you can re-apply with the same or other providers. But try to understand why they refused so that you can address the issues before you re-apply. There’s more information about declined mortgage applications on our what happens if a mortgage application is declined page.
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