What is an agreement in principle?
A mortgage agreement in principle (AIP), also known as an agreement in principle or a decision in principle, is a valuable tool for homebuyers in Manchester. It provides an estimate of how much they could potentially borrow before formally applying for a mortgage.
To obtain an AIP, you will undergo a soft credit check. Unlike a hard credit check, this should have minimal impact on your credit score. You can get an AIP with no obligation to proceed with a mortgage application.
At Manchestermoneyman, we strive to provide our customers with an agreement in principle within 24 hours of their initial mortgage appointment. The agreement in principle is valid for a period of 30-90 days, which is usually sufficient for finding a suitable property. If it expires, we can easily arrange for it to be renewed.
How to get an agreement in principle in Manchester
To obtain a mortgage agreement in principle, you have two options. Firstly, you can directly contact a mortgage lender. Alternatively, you can seek assistance from a trusted mortgage broker in Manchester, like us. Our experienced mortgage advisors in Manchester can liaise with the lender on your behalf to obtain the agreement in principle.
We offer every customer a free mortgage appointment, where you can discuss your requirements with an expert and receive your agreement in principle within 24 hours. To progress with the application, you will need to provide proof of income, employment details, credit history, and other personal information that will help determine your eligibility for a mortgage. This will also provide an estimate of the amount you can borrow.
When to get an agreement in principle in Manchester
It is advisable to obtain a mortgage agreement in principle before starting your property hunt. This will give you a general idea of how much you can borrow, ensuring that you focus on properties within your budget.
Additionally, having an agreement in principle can give you an advantage when making an offer on a property. Sellers and estate agents are more likely to view you as a serious buyer if you have an agreement in principle, potentially giving you an edge over other potential buyers.
However, it is important to note that an agreement in principle does not guarantee that you will be able to secure a mortgage. It is a helpful tool in the home buying process, but further assessments will be conducted during the mortgage application.
Information required to get an agreement in principle in Manchester
When applying for an agreement in principle, the mortgage lender will require certain personal information to assess your eligibility and determine the amount they are willing to lend. This includes details such as your income, employment status, credit history, and other relevant personal information.
The lender may also request additional documents, such as bank statements or proof of income, especially if you are self-employed. These documents help the lender make an informed decision regarding your mortgage application.
The difference between an agreement in principle and a mortgage offer
An AIP is a document that outlines the amount a mortgage lender is willing to lend based on the information provided. It is not a guarantee of a mortgage offer, and no legal contract is established.
A mortgage offer is a formal offer from a lender to provide a mortgage, confirming their willingness to lend based on thorough checks and assessments. A mortgage offer is legally binding, and it outlines the terms and conditions, including the interest rate, mortgage term, and any associated fees.
To obtain a mortgage offer, a more detailed assessment, including a full credit check, is conducted. Additionally, a valuation of the property is required. It is crucial to understand that an agreement in principle is a helpful tool for estimating borrowing capacity, while a mortgage offer is a formal offer with legal implications.
Impact on your credit score in Manchester
Obtaining an agreement in principle for a mortgage typically has minimal impact on your credit score. Most mortgage lenders perform a soft credit check, which does not leave a visible trace on your credit report. However, some lenders may conduct a hard credit check during the agreement in principle process, which can be visible on your credit report and potentially affect your credit score.
It is important to note that a mortgage application itself usually involves a hard credit check, which can impact your credit score. Therefore, limiting the number of mortgage applications and only applying for an agreement in principle when you are serious about proceeding with your property purchase is advisable.
The benefits of having an agreement in principle in Manchester
Having an AIP offers several benefits when applying for a mortgage. Firstly, it provides a clear understanding of the amount you can borrow, helping you focus on properties within your price range and saving time.
Secondly, an AIP gives you an advantage over other buyers when making an offer. Sellers and estate agents are more likely to consider offers from buyers with an agreement in principle, as it demonstrates seriousness and active efforts to secure a mortgage.
Lastly, an agreement in principle can expedite the mortgage application process once you find a property. The initial assessment and eligibility checks have already been conducted, allowing for a quicker and more efficient processing of the application.
Cost of an agreement in principle
Typically, obtaining a mortgage agreement in principle is free of charge. It is a statement from the lender outlining the amount they would be willing to lend based on the information provided. There is no financial commitment involved in obtaining an agreement in principle.
Our mortgage advisors in Manchester can arrange your AIP free of charge! Simply get in touch with our mortgage advisors in Manchester and book a free mortgage appointment online.
Rejection of an agreement in principle
If you are rejected for a mortgage agreement in principle, it means the lender has determined that you are not eligible for the requested amount. The reasons for rejection can vary. It is important to find out why you were rejected and consider factors such as your finances, credit history, and additional information required by the lender.
In some cases, it may be necessary to find a different mortgage lender who is willing to lend the desired amount. It is essential to remember that rejection for an agreement in principle does not automatically mean rejection for a full mortgage application.
The lender will conduct a more detailed assessment during the full application, and they may offer a different amount or type of mortgage. Applying for multiple agreements in principle with different lenders can negatively impact your credit score, so thorough research is advised. Having a mortgage broker can assist in finding the right lender for your needs.
Get your agreement in principle in Manchester today!
If you are a first time buyer in Manchester or looking to move home in Manchester, it is recommended to consult a mortgage broker like us to obtain an agreement in principle before making any offers on a property.
We can provide you with an agreement in principle within 24 hours of your initial mortgage appointment. Our mortgage advisors in Manchester are experienced and knowledgeable, guiding you through the mortgage journey. Book your free mortgage appointment today to begin your mortgage journey with the support of a trusted mortgage broker in Manchester.
Date Last Edited: December 11, 2023
