Agreement in Principle
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Agreement in Principle
James Bull explains an Agreement in Principle and how it can be an important step towards buying a home.
What is an Agreement in Principle?
An Agreement in Principle is where a mortgage broker keys in a mini-application with a lender, which involves a credit check, to make sure you’ll pass the process to get a mortgage.
What should I do if my estate agent is asking to see my Agreement in Principle? How do I get one?
A mortgage broker arranges the Agreement in Principle for you. If your estate agent is asking for one, just contact us and we’ll arrange it for you.
Do I have to have an Agreement in Principle through the estate agent I’m looking to purchase through?
A Decision in Principle could only really be done by a mortgage broker. Estate agents aren’t allowed to force anybody to use their own brokers. In fact, you could have an Agreement in Principle with any mortgage broker that you choose.
How reliable is an Agreement in Principle and how long does this last?
An Agreement in Principle is a reliable indicator that you’ll at least pass the credit score to get the mortgage. In terms of how long they last, it does vary between lenders. Some are just valid for a month long, while others may last up to six months.
Can I make an offer with an Agreement in Principle?
A lot of estate agencies like you to prove that you could afford to buy a house. Your Agreement in Principle proves that you’ve got the money in place to make that offer on a property. So estate agents do like to see them.
Does an Agreement in Principle mean you’ll get a mortgage?
An Agreement in Principle is done at quite an early stage. You do still have to fully apply for the mortgage once your offer is accepted. It’s not a guarantee that you will be accepted for the mortgage once you apply, but it’s definitely a good starting point.
Will I need a credit check and does an Agreement in Principle affect my credit score?
The majority of lenders today do a ‘soft’ credit check at Agreement in Principle stage. These checks don’t affect your credit score.
There is still the odd lender that does a full credit check, which will show on your credit report. In itself, this isn’t usually an issue, as long as you’re not having multiple credit checks done simultaneously.
How do I apply for an Agreement in Principle and how long does this take?
The first step is just to contact us as the mortgage broker. We’ll take all the details and we’ll arrange the Agreement in Principle for you. How long it takes does vary between lenders slightly, but for the vast majority of people, we could get one within 24 hours.
What else do we need to know about an Agreement in Principle?
As mortgage brokers, we help clients by recommending the right mortgage for their personal circumstances. We deal with the Agreement in Principle and then your full application just to make sure everything goes smoothly.
YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.
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