When you start thinking about buying your first home in Newcastle, you’ll soon come across terms like “agreement in principle” and the difference between hard and soft credit searches.
These play a key part in the mortgage process and understanding them early on can help you feel more confident as you begin your property search.
What is an agreement in principle?
An agreement in principle (AIP), sometimes called a mortgage in principle or decision in principle, is an early indication from a lender of how much you might be able to borrow. Getting an AIP before you start looking at properties is a smart move for several reasons.
With an AIP, you’ll know your price range, which means you can focus your search on homes that are truly within budget.
Having this in hand also shows estate agents and sellers that you’re a serious buyer, often making your offers more appealing in a competitive market.
More than anything, it gives you the reassurance that a lender has already reviewed your details and that you’re on the right track to getting a mortgage in Newcastle.
Hard and soft credit searches – what’s the difference?
Credit checks are an important part of any mortgage application. Lenders use these to assess your creditworthiness and decide how much they’re willing to lend.
There are two main types of credit checks: hard searches and soft searches.
Hard Credit Searches
A hard search is a thorough check of your credit file and is usually carried out when you make a formal mortgage application.
This type of search leaves a visible mark on your credit report that other lenders can see.
If you have several hard searches within a short space of time, it can potentially lower your credit score. Getting a mortgage with bad credit in Newcastle may be more challenging if your credit report shows multiple recent hard searches, as lenders often see this as a sign of increased risk.
Soft Credit Searches
A soft search, on the other hand, is much less intrusive. It gives lenders a general overview of your financial history without leaving a mark that other lenders can see.
Most lenders in Newcastle will carry out a soft search when you apply for an agreement in principle.
Soft searches allow you to check your eligibility for a mortgage without any impact on your credit score.
How does an agreement in principle use credit searches?
When you apply for an agreement in principle, the lender will typically use a soft credit search to review your basic details and financial background.
This is a quick way to see if you’re likely to be approved for a mortgage, and it won’t affect your credit rating.
If you decide to move ahead with a full mortgage application, the lender will then complete a hard credit search as part of their final checks.
Why does this matter for first time buyers in Newcastle?
Knowing the difference between hard and soft searches is important if you want to keep your credit score healthy during the home buying process.
Too many hard searches in a short time can make it harder to get approved, especially if you’re also applying for other credit at the same time. By starting with an agreement in principle, usually involving a soft search, you can explore your options with confidence, knowing you’re not harming your credit score.
As a mortgage broker, we help first time buyers in Newcastle understand every step of the process. If you have questions about agreements in principle or how credit searches work, we’re here to guide you and make sure you’re prepared from the very start.
Date Last Edited: July 21, 2025
