An Agreement in Principle is the first step to getting a mortgage. You can obtain one of these from a mortgage lender. As the name implies, the lender will agree in principle to let you take out a mortgage with them.
Any Agreement in Principle gets carried out before the final checks, and whilst it is not a guarantee that you will get accepted for a mortgage, it is a good sign that you are on the right track on your mortgage journey.
Despite what people say, a Mortgage in Principle, a Decision in Principle, and the abbreviations AIP and DIP all mean the same thing.
Once armed with your Agreement in principle, you will be fully prepared to increase your odds of having your offer accepted on a property against any other potential First Time Buyer in Doncaster.
You may also even open yourself up to the chance of negotiating with the seller at a lower price. As you have demonstrated to the property seller, you are looking to purchase that you are a serious buyer and do have the funds to proceed.
We regularly see more lenders choose to go with soft searches instead of hard searches. The main reason is that a soft search won’t affect your credit score, as they don’t usually leave a footprint, whereas a hard search does.
Having too many hard searches can cause more harm than good, especially if you don’t pass each time. That’s not to say a soft search will not affect you, but it can happen.
A soft search does not go as in-depth as hard searches. However, no matter which one the lender chooses to use, they will have their reasons for selecting either a soft or hard search.
If you do not have hard searches done regularly, then having one done shouldn’t make too much difference. The main issues are when you start having loads of hard searches taken out on you within a short space of time.
It’s essential to understand that if you are well aware that you do have a good credit rating, you should put off on the idea of getting one done, especially if a mortgage lender says that a hard credit search is the most suitable option for you.
Unfortunately, even armed with an Agreement in Principle in hand, we cannot guarantee you’ll be successful as other factors come into play. For example, the lender still needs to see all your documentation and evidence to make a final decision.
We receive regular phone calls from customers after getting declined during their application process, as they have failed to read the small print in their Agreement in Principle.
On top of always reading the small print, you will need to provide your mortgage lender with proof of ID, the last 3 months payslips and bank statements to show evidence that you can handle money responsibly, all before a lender will offer your case.
Please remember that the required documentation for a Self Employed Mortgage Applicants in Doncaster is slightly different.
You can make an offer without an Agreement in Principle to hand. However, we believe you would be much better off having one with you.
Any credible estate agent will ask you for one of these, as they will want to know that you can go ahead with the mortgage process.
One of our team of Mortgage Advisors in Doncaster can usually obtain you with an Agreement in Principle within 24 hours of your initial appointment.
An Agreement in Principle expires between 30-90 days after being obtained. That said, you don’t just have to jump at the first house you see. Take your time when looking for a home. A mortgage will be one of our most significant financial commitments.
If your Agreement in Principle has expired, one of our Mortgage Advisors in Doncaster can quickly get you a new one.
Finding your dream home only to be declined by a lender can be both frustrating and disheartning. This is why we always recommend to new/existing customers to get an Agreement in Principle as early as possible, to ensure you are prepared for the mortgage process.
For more information regarding an Agreement in Principle and how they can help improve your chances of getting an offer accepted, Malcolm has put this video together.