By Kylie-Ann Gatecliffe, KAG Finance

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 as to which they would be willing to lend based on your information provided. This then produces a certificate with most lenders, which can then 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. Even more complex clients can obtain them usually within 24-hours.

Completing an AIP yourself…

The danger of completing a decision in principle yourself online is that you can choose the wrong lender. Understanding lenders criteria takes time and a lot of experience, which is why using an advisor like myself to guide you on which lender is not only the most suitable, but most competitively priced, is key.

I have had clients in the past try to quickly obtain an agreement in principle and fill in the application incorrectly, causing it to decline – which can ultimately damage 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.

Your property may be repossessed if you do not keep up payments on your mortgage. There will be a fee for mortgage advice. The precise amount will depend on your circumstances but may range from £399 to £599.
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Kylie-Ann Gatecliffe
KAG Financial Ltd
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