Getting the green light on your mortgage application

How much could you borrow towards the purchase of a property or remortgage?

Arranging a mortgage is a significant step, and the term you are likely to encounter is an ‘Agreement in Principle’ (AiP), also referred to as ‘Decision in Principle.’ But what does it entail, and how can it facilitate your dream home purchase?

During your property-hunting journey, you can expect to face competition from other potential buyers. Possessing an AiP communicates to sellers, developers and estate agents that you’re not just a serious buyer but one who can genuinely afford the properties you’re viewing or considering for offers. If you’re buying property in Scotland, you’ll have to get one before you submit a bid, and other charges may apply in Scotland and Wales.

Determining your borrowing capacity

An AiP is a simple way to determine if you can borrow the amount you need to buy or remortgage a property without a full credit check. You’re not committing to anything, and you’re not tied to a particular type of deal. But remember that an AiP isn’t a guarantee you will secure the mortgage.

An AiP will help you understand how much you could borrow and give you the assurance of viewing properties. This is especially beneficial if you’re a first-time buyer. You will typically need the following information to apply for an AiP: details of your income, your outgoings, any existing credit agreements and your addresses for the last three years.

Accelerating the home-buying journey

Having an AiP allows you to start your property search. Although it isn’t a formal offer or a guarantee, it usually lasts 30 to 90 days. However, it signals that the lender will likely lend you the required amount to buy the property. This assurance can speed up the buying process as sellers recognise your serious intent.

To obtain an AiP, you must disclose information about your finances, including your income, expenses and credit score. The lender will use this data to determine how much they may lend you. Remember that an AiP isn’t binding, and the final loan amount may vary based on your circumstances. You will also need to pass a credit check for mortgage approval.

Seeking professional expert mortgage advice

Considering an AiP is worthwhile if you plan to buy a property soon. It kickstarts your property search process and provides peace of mind. Additionally, it demonstrates to potential sellers that you have the means to secure a mortgage and afford their property.

However, each AiP application could impact your credit file. Hence, it’s advisable to seek professional mortgage advice before you begin. If you require further assistance or information, please contact us. We’re here to guide you through this process.

Completing a credit check

Before any mortgage lender will approve your mortgage application, they conduct a comprehensive credit check. Understanding the difference between ‘soft’ and ‘hard’ credit checks is essential. 

A ‘soft’ credit check is preliminary and doesn’t adversely impact your credit score. On the other hand, numerous ‘hard’ checks within a short timeframe can diminish your credit score and remain on your report for four years.

Are you ready to discuss your mortgage options with us?

We are here to assist you throughout the process of acquiring an AiP. Our team will evaluate your situation and explain your options. For more information or to discuss how we could help you with your mortgage requirements, contact Fitch & Fitch – telephone 020 7859 4098 – email