An Agreement in Principle (AIP) is where you pass a Lender credit score to qualify for a potential mortgage. Sometimes you may also hear it being called a Decision in Principle.
With an Agreement in Principle in hand, you are ready to support any offers you make as a First-Time Buyer in Manchester. You may be able to negotiate a lower price if you have one of these as it shows the seller you are serious and have the funds to proceed.
Nowadays we see more lenders using soft searches than not, however some may still affect your credit score. This can be the case if it is a hard search, but usually a soft search should leave your credit score unaffected.
Soft searches don’t dig as deeply as hard searches, though you can trust that the lender made the correct choice either way.
If it is once every blue moon, then a hard search or two should not make too much difference. The problems arise if you start having multiple hard searches within a small window of time.
That being said, if your credit rating is good and you know it, do not let this put you off, especially if taking a hard search with that lender is the best deal.
Though it would be nice, there are no guarantees that having an Agreement in Principle will get you a mortgage. The Lender will still need to see all your documents and only then will an Underwriter make the final decision.
Often we find that customers get in touch having been declined at application stage, due to missing some small print in their Agreement in Principle. You will need to provide ID to prove that you are genuine, payslips to prove you earn the amount you claimed and bank statements to prove you conduct your finances, before a lender will offer your case.
Though it is possible to make an offer without an Agreement in Principle, we would not recommend it. An Estate Agent with credibility will want you to prove you can in fact proceed.
It is possible to obtain an Agreement in Principle within 24 hours of speaking with a Mortgage Advisor in Manchester.
Usually an Agreement in Principle will expire after 30-90 days. You do not need to worry though as this does not mean you should just apply for the first house you find. If your Agreement in Principle expires, you can quite easily have it refreshed when you are ready to make an offer.
Finding a mortgage only to be declined a mortgage can understandably be disappointing. As such, we recommend getting an Agreement in Principle as early as possible.