What's an Agreement in Principle?

With an Agreement in Principle (AIP), you can take the first step to buying or remortgaging your home. An AIP will give you an idea of how much you could borrow before you apply for a mortgage.

What is a mortgage Agreement in Principle?

What is a mortgage Agreement in Principle?

A mortgage Agreement in Principle helps you understand how much you could borrow before you apply for a mortgage.

It’s also known as a Mortgage Promise or Decision in Principle and is often seen as the first step to buying or remortgaging a home.

A mortgage Agreement in Principle is obligation-free and only involves a soft credit check, which means there’s no impact on your credit score.

What information do I need to get a mortgage Agreement in Principle?

When applying for an Agreement in Principle, you will typically need the following information:

  • The exact details of your income.
  • Notes on your outgoings and any existing credit agreements.
  • Your addresses for the last three years.

How long does a mortgage Agreement in Principle last?

A mortgage Agreement in Principle is usually valid for between 30 and 90 days. In some cases it is possible to renew the terms of the agreement after the 90-day period, otherwise you may have to arrange new terms.

Why apply for a mortgage Agreement in Principle?

As well as letting you know how much you could borrow, a mortgage Agreement in Principle will also give you an idea how much you can afford to spend on your new home. That means you can start looking at properties in your price range.

It could also help you agree a better price with the seller, because it shows you're a serious buyer.

  • It only takes about 15 minutes to complete, and we’ll give you a decision straight away.
  • We’ll ask some questions about you and anyone else who’s applying, including details about your income and expenditure.
  • We’ll only do a soft credit check, which won’t affect your credit score.

The amount we could lend is not guaranteed and is subject to a full mortgage application.

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What happens after getting a mortgage Agreement in Principle?

Having a mortgage Agreement in Principle means you can view properties with a clearer understanding of what you can afford.

While it isn’t compulsory to have an Agreement in Principle to view properties, it can show estate agents and sellers that you are serious about buying. An Agreement in Principle also means you can make an offer as soon as you find your ideal home.

How is an Agreement in Principle different from a mortgage offer?

A mortgage offer is an official document from your lender to confirm they will provide you with a mortgage for a specific property.

This is only provided after you have completed a full mortgage application where more detail is provided, and a full credit check has been carried out.

Will a mortgage Agreement in Principle affect my credit score?

An Agreement in Principle does not affect your credit score as it only involves a soft credit check.

When you apply for a mortgage, a full credit check is carried out. Though one or two checks typically won’t affect your score too much, additional checks can start to lower your overall rating.

The content on this page is for reference and does not constitute financial advice. For impartial financial advice, we recommend government bodies like MoneyHelper.

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