Here you’ll find out the basics that you need to know about agreements in principle, including the pros and cons of getting one. For more information, get in touch and speak with one of our expert Mortgage Advisors in Cambridge today. An Agreement in Principle (also known as an AIP or Decision in Principle) is where you pass a Lender credit score to qualify for a mortgage.
By obtaining an Agreement in Principle, you prove that you are ready to support any offers you make as a First-Time Buyer in Cambridge. It may also help negotiate a lower price if you have one of these, as it shows the seller you are serious and have the means to continue with the process.
The more commonly seen methods of credit scoring are via soft searches rather than a hard search. These may still affect your credit score, though a hard search will usually be more likely to do this than a soft search.
Reasons come down to a hard credit search that can leave a credit footprint, whereas a soft search does not. Regardless, you can rest assured that whichever is used by the Lender is done with the best intentions.
Having your credit checked via a hard search every so often should not make too much difference. It becomes an issue if you take too many of these within a small amount of time. On the flip side, if you know you have a good credit score and the best path to take with a lender, this should not be a problem.
Whilst the prospect of this would be excellent, there are no guarantees that having an Agreement in Principle will allow you to get a mortgage. The Lender will still require seeing all your documents, and only then will an Underwriter make the very final decision.
Often we find that customers contact us after they got declined at the application stage due to missing some small print in their Agreement in Principle. You will need to provide ID to prove that your identity, payslips to prove your income and bank statements to prove you are smart with money before a lender offers your case.
Though you can make an offer without an Agreement in Principle, we would not advise doing so. Any credible Estate Agent will want you to prove you can progress onward.
It is possible to obtain an Agreement in Principle within 24 hours of getting in touch with an experienced mortgage advisor in Cambridge.
Typically, an Agreement in Principle will expire after 30-90 days. The good news is that this doesn’t mean you should apply for the first house you find. If your Agreement in Principle expires, it’s not difficult to obtain another ahead of making an offer.
Finding a mortgage only to be declined a mortgage can cause understandable disappointment. With this in mind, we recommend getting an Agreement in Principle as early as possible.