If you have had credit problems in the past or have a limited credit history and are not sure what a bank or construction credit union might lend you, an agreement in principle could give you extra security from your credit perspective. Below, I provided six important useful points on the mortgage decision in the policy process: You don`t have to go through the full application process to get an agreement in principle. This will come later if you have accepted an offer on a property. An Agreement in Principle (AIP), also known as “approval in principle,” “decision in principle,” “Mortgage in Principle” or “Mortgage in Principle,” is a written estimate from a lender that indicates what you can possibly borrow. You can usually receive an IPA within 24 hours and it is usually valid for up to 90 days. To confuse matters, mortgage lenders refer to the initial mortgage decision-making procedure, either by the term “agreement in principle (AIP)” or “decision in principle” (DIP). If you apply for an PIA, the lender will check your credit file to determine if you have the right to borrow from them and if they are willing to borrow the amount you need. An agreement in principle (AIP) – also called Mortgage In Principle (PMI) decision – is a written estimate or statement from a lender to say how much money it would lend you if you bought a property. At this point, you do not need supporting documents such as pay slips or bank statements. The buying process is a little different in Scotland.

Before you can make an offer for a property, you often need an AIP so you can take it seriously. Once you have your agreement in principle, you can see real estate within your specific price range; that is, the amount you could possibly borrow, plus each deposit you may have saved. An AIP does not guarantee your loan, as it is not a mortgage offer. And if the lender finds something you haven`t mentioned before that has a negative impact on your ability to get a mortgage, they might change their mind about whether they lend to you, how much they would borrow and what the interest rate will be. If the lender or mortgage advisor needs additional information or documentation, they must return within 24 hours. You don`t need to get an agreement in principle, but it can sometimes help if you`re very handsome (see “How an AIP Can Help,” below). As part of an IAP, the lender or advisor must carry out a credit check (with your consent). When the lender makes what is called a “hard check,” it leaves a “fingerprint” on your credit report.