Agreement in Principle and Soft Credit Searches

When you successfully navigate a lender’s credit assessment for a mortgage, you receive a document known as a mortgage agreement in principle (AIP). Often abbreviated as AIP, this essential document empowers you to confidently make offers on properties you’re interested in.

It serves as tangible proof of your serious intent as a first time buyer in Leicester and can bolster your negotiating position when discussing house prices with sellers.

What effect does an AIP have on your credit score?

The distinction between a hard credit search and a soft credit search plays a pivotal role in the mortgage application process. Here’s a breakdown of their disparities:

Hard Searches:

Hard searches delve deeper into your credit history compared to soft searches. Notably, hard searches have the potential to impact your credit score. However, if you possess a healthy credit rating, undertaking a hard search shouldn’t cause undue concern, particularly as a first time buyer in Leicester.

Soft Searches:

Presently, lenders predominantly favour conducting soft searches. These inquiries typically require less detailed information and typically have minimal to no impact on your credit score.

Does an AIP guarantee a mortgage in Leicester?

Despite the significance of a mortgage agreement in principle, securing one doesn’t guarantee mortgage approval. Lenders require thorough documentation to facilitate a final decision by the underwriter.

It’s essential to scrutinise the fine print of these agreements, as overlooking important details could lead to setbacks during the full mortgage application process.

Customers often seek our guidance when faced with challenges at the full mortgage application stage, emphasizing the importance of meticulous preparation.

Documents typically requested include identification, payslips, bank statements, and other relevant financial records. As your trusted mortgage broker in Leicester, we’re dedicated to helping clients, whether they’re moving home in Leicester or self employed in Leicester.

Is my AIP a necessity when making an offer?

While it’s possible to bypass this step, most estate agents will insist on evidence of your financial readiness to proceed with a property purchase.

How long will my AIP last for?

Mortgage agreements in principle typically have a validity period of 30 to 90 days. While this timeframe may seem fleeting, it’s advisable to secure an AIP early to prevent missing out on preferred properties.

Having an AIP in hand also affords you the flexibility to explore multiple housing options without feeling pressured to rush into a purchase. Should your AIP expire, obtaining a new one is a straightforward process.

Date Last Edited: February 9, 2024