An Agreement in Principle is a lender's written estimate of what it would be prepared to lend you, based on an initial check of your income, outgoings and credit file. It is not a mortgage offer and it is not binding — but most estate agents will want to see one before they take your offer seriously, it is free, and it usually takes minutes to arrange.
If you have started looking at properties, you will have met this document under three or four different names. This guide explains what it is, how to get one quickly, what it does to your credit file, and where it stops being useful.
There is no difference between them. Agreement in Principle (AIP), Decision in Principle (DIP), Mortgage in Principle (MIP) and the occasional “mortgage promise” all refer to the same document. Different lenders and brokers simply use different names for it. If an estate agent asks for your “decision in principle”, they want exactly what another one called an “agreement in principle”.
Most applications take 10 to 15 minutes, and an Agreement in Principle is free. With the right information to hand you can often have one the same day, and almost always within 24 hours.
It depends on the lender, and it is worth asking before you apply. Most lenders run a soft credit check at this stage, which leaves no visible footprint and cannot be seen by other lenders. Some run a hard check, which does leave a mark on your file.
That distinction matters if you are shopping around, because several hard searches in a short period can make you look to a lender as though you are struggling for credit. One of the things an adviser does is steer you towards lenders who use a soft search while you are still deciding.
When you go on to make a full mortgage application, a hard credit check is always carried out.
Most delays are self-inflicted. Five things make the difference:
Typically 30 to 90 days, depending on the lender. If your search runs longer you can usually renew it, and provided your circumstances have not changed materially that is straightforward.
If your income, your debts or your spending change significantly in the meantime, the figure in your Agreement in Principle may no longer hold — tell your adviser rather than assuming it still stands.
This is the distinction that catches people out. An Agreement in Principle is conditional, based on limited information you have declared. A mortgage offer comes after a full application: full documentation, verified income, underwriting, and a valuation of the actual property.
Yes. An Agreement in Principle is based on preliminary checks and what you have told the lender. A full application can still be declined if:
This is not a reason to skip the Agreement in Principle. It is a reason to have someone prepare the full application properly, and to be honest at the first stage rather than the last.
You can get an Agreement in Principle directly from a bank or building society, and if your circumstances are simple and you are happy with that lender, that is a perfectly reasonable thing to do.
The difference a broker makes is breadth. We check your situation against the whole market rather than one lender's criteria, which matters most when:
In those cases the gap between the most generous lender and the least generous is not small — it can be tens of thousands of pounds of borrowing. Picking the right one first time also avoids collecting hard credit searches as you work down the list.
Find out what you could borrow with our borrowing calculator, or read our guides for first-time buyers and home movers.
Do I need one to view a property?
Not legally, but many estate agents ask for one before booking viewings, and in a competitive market most will.
Is an Agreement in Principle the same as a Decision in Principle?
Yes. The terms are interchangeable, as is “Mortgage in Principle”.
Can I make an offer without one?
You can, but your offer is weaker. A seller choosing between two similar offers will take the credit-checked buyer.
How long does it take to get one?
Often the same day, and usually within 24 hours once the lender has what it needs.
Does it cost anything?
No. An Agreement in Principle is free, and at Friends Capital your initial consultations and discussions with your adviser are free too — our fees are set out in full before you commit to anything.
How many can I have at once?
As many as you like in principle, but be careful: if the lenders are running hard credit searches, several in quick succession will show on your file. This is the main reason to take advice before applying rather than after.
We are an independent, whole-of-market mortgage broker at Beehive Works in Sheffield, authorised and regulated by the Financial Conduct Authority (FRN 650114). We can usually arrange an Agreement in Principle the same day, and you can read more about our Sheffield mortgage advice.
We will tell you honestly what you can borrow, which lenders are most likely to say yes to your circumstances, and whether now is the right time to apply at all. Your initial consultations and discussions with your adviser are free, and our fees are set out in full before you commit to anything.
Call 0114 303 1031, email info@friendscapital.co.uk, or get in touch through the website.
