Most lenders do a “hard” loan search before offering you a basic agreement that leaves a trace in your loan file. To reach an agreement in principle, you must contact a mortgage lender directly or through a mortgage broker. Even if it is not a complete mortgage application, you will still need to provide information to reach an agreement in principle. Typically, you can get a mortgage online, over the phone, or – if you`re applying to a bank or construction company – at the branch. You don`t have to go through the entire application process to get an agreement in principle. This will come later when you have accepted an offer for a property. If you would like to speak to an advisor or get an agreement in principle, talk to one of our mortgage advisors on 0117 2050240. You don`t need to get an agreement in principle, but it can sometimes help if you`re looking for a home (see “How an AIP can help you” below). Some real estate agents or sellers will be happy to know that you have an agreement in principle before looking at a property or making an offer, as it gives them the peace of mind that you can afford it and it won`t affect the sale.
Simply put, an agreement in principle, sometimes written only in the form of a PSA and also called “or “policy decision” or “mortgage in principle,” is a written estimate from the lender that describes how much you can borrow. A Memorandum of Understanding (MOU) – also known as a strategic decision (DIP) or mortgage in principle (MIP) – is a written estimate or statement from a lender to say how much money they would lend you if you bought a property. The mortgage lender will take a close look at all of your financial history, including bank statements, salary and additional income, employment and address history, the amount of a deposit you have, and any other savings. This is a so-called affordability check. So you want to get an AIP and you`re wondering what`s next? The first step is to talk to one of our consultants where we get to know you and your situation. Take a look at what you need for a mortgage appointment and what you can expect to be ready. Reaching an agreement in principle usually won`t take as long and our advisors will always try to contact you within 24 hours with an update of your AIP. Be sure to get advice on products and lenders before proceeding with an agreement in principle, as an agreement can leave a soft or hard imprint on your credit report. You are then offered a mortgage based on what the lender thinks you can afford. It may be more or less than you originally planned.
You must provide basic personal data, including your salary, how much you want to borrow, and what adds up approximately all your monthly fees. A decision in principle is not a guarantee. If you go through the full application process, the lender will take a closer look at your income and credit history. You can choose not to lend yourself credit at this point. A decision of principle shows that one can theoretically afford to buy a property . . .