Agreement in principle
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With the current market situation, house prices are stable and Interest rates have started to ease, and so many first time buyers are actively looking to purchase their first home. Before you start your dream property search, most estate agents wants to know if you are mortgage ready. One way of proving you are mortgage ready is have a Decision in principle or Agreement in principle to hand.
Estate agents will ask you for your mortgage in principle before submitting your offer.
What is a mortgage in principle?
A mortgage in principle is a preapproval version of your mortgage from the lender which tells you roughly how much you may be able to borrow.
Do I need mortgage in principle ?
It is not compulsory to have it, but it is beneficial.
After the viewing of a property, if you wish to submit an offer for that property your agent will want to know if you are serious buyer. Can you get a mortgage of the amount needed to secure the sale?
AIP will put you in a good position of showing to the agent that you could secure the mortgage on the property.
As a result, if you make an offer on the property, it is likely to be accepted.
How do I get an AIP?
You can get your AIP from the lender. If you use a mortgage broker, they happily will arrange one for you.
If you go directly to a bank or building society you can get it directly from them as well.
Most lenders do a soft credit check on an MIP but it could still be a hard search on your credit file.
To clear any doubts, ask your mortgage broker about it.
MIP is based on the information provided and still subject to lender criteria and final underwriting.
Speak to us at MariannaFS we can arrange your MIP without a hard credit check.
How long mortgage in principle will be valid?
It varies from lender to lender but usually between 3 or 6 months. Most lenders that issue MIPs make them valid for 3 months.
Your mortgage broker should be able to guide you on which lender and rate are suitable for your circumstance.
It is a good idea to check your credit report if your current DIP is expired and you need another one.
Is a mortgage in principle reliable?
Considering the lack of guarantee, it is common for people to doubt whether a mortgage in principle is reliable.
While it does not provide you with any certainty, an MIP definitely gives you a sense of direction for getting the mortgage you are looking for.
With a mortgage in principle at your disposal, you can prove how serious you are about making a purchase to estate agents you approach while searching for the right property.
MariannaFS are able to arrange your DIP for you.
Speak to our friendly advisors for your mortgage needs by submitting form.
