Agreement In Principle

What is an agreement in principle? (AIP)

An Agreement in Principle (commonly shortened to AIP, sometimes called a Decision/Mortgage in Principle) is a mortgage lender’s way of saying whether they’d be likely to offer you a mortgage provided your circumstances don’t change significantly.

An Agreement in Principle is not legally-binding and being granted one is not a guarantee that you will be offered a mortgage, even if you make an application with the same lender. These checks are not compulsory, but they may give you a better insight into what a mortgage lenders is looking for.

An AIP looks at your finances and your credit file at a glance, but when it comes to the actual application, mortgage lenders will look at your information in far greater detail, which is when they might spot something that was not immediately apparent.

These days many lenders will allow you to carry out an Agreement in Principle online, which offers a quick assessment of your affordability, along with a search of your credit file. Some lenders will carry out a ‘soft’ search, while others may do a full ‘hard’ search.

Some AIPs may be subject to a property valuation or certification of claimed income, but this will vary from lender to lender, so it is important to check their requirements first to ensure the best chance of acceptance.


Q: How reliable is an agreement in principle?

A: The success rate will vary depending on which lender you use, but if there is something glaringly out-of-place with your finances or on your credit file, an Agreement in Principle should spot this ahead of time.

Q: Why is a credit check used?

A: Depending on what type of credit check is used by the lender, a check might be carried out to verify your details or to assess your credit history, both of which will be essential when the actual application is carried out.

For the best chances of getting an Agreement in Principle or getting accepted for a mortgage, it is recommended to check your credit file beforehand. Checkmyfile’s Multi-Agency credit report gives you data from 4 Credit Reference Agencies, not just 1, so you can see what lenders see. Try checkmyfile free for 30 days, then for just £14.99 a month afterwards.

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