What is an Agreement in Principle (AIP)?

An Agreement in Principle (AIP), “decision in principle” or a “mortgage in principle” are all terms that refer to the same thing. A lender will take basic information from you, such as name, date of birth, address history, income and outgoing details – and from that information perform a credit check.

This allows lenders to produce a figure they would be willing to lend based on your information provided. In most cases, you will be given a certificate which can  be shown to estate agents to prove you are in a good position to proceed with a house purchase.

Most decision in principles can be done within minutes.

Do I complete a mortgage in principle myself?

The danger of completing a decision in principle yourself is that it is easy to choose the wrong lender. Understanding lenders criteria takes time and a lot of experience, which is why using a mortgage adviser to guide you on which lender is not only the most suitable, but most competitively priced – is key.

If you rush and try to quickly obtain an agreement in principle and fill in the application incorrectly, it can be declined – damaging your credit rating.

Having a decision in principle puts you in a great position as a buyer. It means when you are viewing properties, especially in a competitive market, it allows you to act fast. Most vendors won’t accept offers until a buyer has a decision in principle, so making sure you have this early means you are prepared.

Create your own Mortgage Dashboard and start the process of getting an Agreement in Principle

Linear Financial Solutions’ mortgage finder facility is a really simple tool that helps you on the first steps to securing a mortgage. Simply answer a few questions, set up your account and be matched with potential lenders.

You can then book a call with a mortgage adviser who can then help you, through every step of the process – including getting a mortgage in principle.

Start your 60-second mortgage match

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Your property may be repossessed if you do not keep up payments on your mortgage. Linear usually charges a fee for mortgage advice. The precise amount will depend on your circumstances but may range from £399 to £599 up to a maximum of 1% of the mortgage amount. The fee is payable when an application is submitted to a mortgage lender and is non-refundable.

Author
Kylie-Ann Gatecliffe
KAG Financial Ltd
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