Once you have passed the Lenders credit score to qualify for a mortgage, you will be granted an Agreement in Principle. You may see this talked about online as an AIP. By obtaining this, you will then find yourself in a much better place to make an offer on a property. It’s also useful when negotiating the asking price, as the seller knows you’re serious and ready to go.
How an AIP can possibly affect your credit score is entirely dependent on the type of search the lender opts to go with. These include Soft and Hard Credit Searches, of which will be explained below;
Nowadays you will find that most lenders will prefer to carry out Soft Searches. They’re similar to Hard Searches, though they will usually require less strict information and can leave your Credit Score, for the most part, unaffected.
As detailed above, Hard Searches are a lot more in-depth than Soft Searches. The main difference between the two, is that taking too many Hard Searches over time could drastically hurt your credit score in the long run. This should not be a problem however if you already know you have a good score, prior to this.
Whilst obtaining an Agreement in Principle is incredibly helpful with the mortgage process, it will not guarantee a mortgage. You will still be required to provide the lender with documents and then a final decision will be made by their underwriter. Agreements in Principle may often include smallprint that goes unnoticed by customers.
We find that when customers have gotten in touch regarding their Agreement In Principle, they may have been turned away at full mortgage application stage. This is especially often the case for First-Time Buyers in Newcastle or people enquiring in Right to Buy Mortgages. It can also come into play when Moving Home in Newcastle.
The documents required include ID, Payslips, Bank Statements and more. As your Mortgage Broker in Newcastle, we take pride in helping you with Getting Prepared For a Mortgage in Newcastle.
Technically you can go through the process without one, although any credible Estate Agent will want you to provide evidence that you are able to proceed with the purchase in question.
Usually, your AIP lasts around 30-90 days, although there is no need to worry, you do not have ‘limited time’. The main reason we recommend getting one so early is to avoid you finding a property that is perfect for you, only to be told a Mortgage is not obtainable based on your circumstances. As such, you don’t always need to buy the first house you see after you get your AIP. It’s quite quick and easy to obtain, so if it expires you can get another relatively soon after.
For more information on Mortgage Agreements in Principle and Credit Scores, please get in touch with a Mortgage Broker in Newcastle and we’ll advise you the best we can.