Normally, you can apply for an AIP online on a mortgage lender`s website. According to Halifax, the AIP application normally lasts about 15 minutes. You can also request an AIP during your mortgage interview. A decision of principle shows that one can theoretically afford to buy a property. This could make you a more attractive buyer and pull you away from other potential buyers. Potential buyers with an agreement in principle are considered favorable, both by real estate agents and sellers. Also, you`re better prepared to make an offer if you have an idea of how much you can borrow. In principle, a mortgage is not a formal mortgage offer, nor is it guaranteed that the lender will grant you a mortgage in the future. You are then offered a mortgage based on what the lender thinks you can afford. You will find information about the commission we receive from mortgage brokers and secured loans and insurance in our help area. An AIP is not the same as a formal mortgage offer, so you should always apply for a mortgage once you have accepted an offer for a property. † Experian acts as a credit intermediary and not a lender in providing its credit cards and personal, auto finance and collateral services, which means it will show you products offered by lenders and other brokers. You don`t need to get an agreement in principle, but it can sometimes help when you`re looking for a home (see “How an AIP can help,” below).
An agreement in principle, also known as a “decision in principle,” “promise of mortgages,” or “mortgage in principle,” is a certificate or statement from a lender that states that they would lend you a certain amount “in principle.” If you have an agreement in principle and decide to make a full application to this lender, you must provide more detailed personal information. The lender is not required to lend you the full amount described in the AIP. Most lenders do a “hard” credit search before offering you an agreement in principle that leaves a trace in your credit report. . . .