To confuse matters, mortgage lenders refer to the initial mortgage decision-making procedure, either by the term “agreement in principle (AIP)” or “decision in principle” (DIP). You can complete the entire process online – it should in principle only take about 15 minutes to get a mortgage. Filling out online forms with some lenders can even make you an immediate offer. It may take longer if you do it over the phone or in the store. Not officially, but with an AIP, real estate agents and sellers consider you a serious buyer and not a waste of time. It could also speed up the process of buying a home, which can often get longer. You don`t need to go through the full application process to get an agreement in principle. This will come later if you have accepted an offer on a property. If you remortgaging, there is less need for this information, so you would file an agreement in principle once you have chosen a lender and a product. If you have an interest in talking to an advisor or getting an agreement in principle, then speak to one of our mortgage advisors on 0117 2050240. Even if it is not a full mortgage application, you must still provide information to obtain an agreement in principle. An AIP does not guarantee that you will be accepted to borrow this amount. If you`ve had a change in circumstances, for example, you now have a small deposit or you`ve changed jobs, this could affect your full application.
Simply put, an agreement in principle, sometimes written in the same way as the AIP, is also called a “policy decision” or “mortgage in principle,” a written estimate of the lender that indicates how much you can borrow. If you have had credit problems in the past or have a limited credit history and are not sure what a bank or construction credit union might lend you, an agreement in principle could give you extra security from your credit perspective. In principle, you will receive a mortgage online, over the phone or, if you apply from a bank or real estate credit company, in a branch. Subsequently, I provided six important useful points on the mortgage decision in the policy process: A policy decision shows that one can theoretically afford to buy a property. This could make you a more attractive buyer and set you apart from other potential buyers. One thing you should note is that consulting an AIP could cause you credit defaults. To finalize the AIP, a credit quality check must be carried out. When a “hard check” is executed, a “fingerprint” remains on your credit report. This means that if you request multiple IPAs in a short period of time, this could have a negative impact on their credit rating. However, some lenders and consultants will use a soft credit check, so it is important to know which one is taking place. A decision in principle is not a guarantee.
If you go through the full application process, the lender will take a closer look at your income and credit history. You can choose not to give yourself credits at this point. The size of your contract can in principle be a useful indicator of how much you can borrow. You can use it to search for real estate in your price range.