Agreement in Principle

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Agreement in Principle (Part 1)

Henny Lessey explains how an Agreement in Principle works.

What is an Agreement in Principle?

An Agreement in Principle is a lender’s early indicator of how much they may be willing to lend you. It’s also called a Decision in Principle, a Mortgage in Principle, a Mortgage Promise or Approval in Principle.

What should I do if my estate agent is asking to see my Agreement in Principle? How do I get one?

You can share it with them, but you don’t have to provide all the details. You can get an Agreement in Principle from a lender or a mortgage broker, usually online in minutes.

Do I have to have an Agreement in Principle through the estate agents I’m looking to purchase through?

No, you can get an Agreement in Principle from any lender or broker you choose. You’re never tied to the estate agent’s in-house service.

How reliable is an Agreement in Principle and how long does an AIP last?

It’s a good guide, but it’s not a guarantee. Most Agreements in Principle last between 30 and 90 days, depending on the lender.

Can I make an offer with an Agreement in Principle?

Yes, an Agreement in Principle strengthens your offer and shows you’re a serious buyer.

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We can advise how much you can borrow, find the most suitable lender and have that Decision in Principle in place. Then, when you do make an offer on a property, you’re ready to go.

Does an Agreement in Principle mean you’ll get a mortgage?

Not necessarily. The full application still requires deep checks on your documents, credit, and the property itself.

Will I need a credit check? Does an Agreement in Principle or Decision in Principle affect credit score?

Most lenders run a soft check that doesn’t affect your score. A few may run a hard check, which can leave a temporary mark on your credit file.

How do I apply for an AIP and how long does this process take?

You can apply online or through a broker by answering some basic financial questions. It usually takes anywhere from a few minutes to a couple of hours.

How can a mortgage broker help here? Is there anything else we need to know?

A broker will find the right lender, handle the paperwork and improve the chances of you getting approval. We also help you avoid lenders that may decline you later.

Key Takeaways:

An Agreement in Principle (AIP) is a lender’s early indicator of the amount they may be willing to lend you.
The AIP strengthens your offer and shows you are a serious buyer.
It is a good guide, but not a guarantee of a mortgage, as the full application involves deep checks on documents, credit, and the property.
You can get an AIP from any lender or broker and are not tied to the estate agent’s in-house service.
Most lenders perform a soft credit check that does not affect your score, and the application process usually takes a few minutes to a couple of hours.

YOUR HOME OR PROPERTY MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON A MORTGAGE.

THERE MAY BE A FEE FOR MORTGAGE ADVICE. THE PRECISE AMOUNT OF THE FEE WILL DEPEND UPON YOUR CIRCUMSTANCES BUT WILL RANGE FROM £99 TO £999 AND THIS WILL BE DISCUSSED AND AGREED WITH YOU AT THE EARLIEST OPPORTUNITY.

ASSET HARBOUR MORTGAGE AND PROTECTION LIMITED TRADING AS ASSET HARBOUR MORTGAGE AND PROTECTION ARE AN APPOINTED REPRESENTATIVE OF HLP PARTNERSHIP LIMITED, WHICH IS AUTHORISED AND REGULATED BY THE FINANCIAL CONDUCT AUTHORITY.

ASSET HARBOUR MORTGAGES & PROTECTION LTD ARE REGISTERED IN ENGLAND AND WALES. REGISTERED NO: 11945863. REGISTERED OFFICE: 54A CHURCH ROAD, ASHFORD, MIDDLESEX, UNITED KINGDOM, TW15 2TS.

Agreement in Principle

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