If you're thinking of buying a property in the UK, one of the first steps you'll likely come across is securing a Mortgage Agreement in Principle (AIP), also known as a Decision in Principle (DIP). But what exactly does it mean, and how important is it in the homebuying process?
At Friends Capital Ltd, we’re here to demystify the mortgage process and guide you through every step. In this article, we'll explain what a Mortgage Agreement in Principle is, how to get one, what lenders look for, and why it could make a big difference when searching for your next home.
A Mortgage Agreement in Principle is a statement from a mortgage lender indicating how much they might be willing to lend you, based on a preliminary assessment of your financial situation. It’s not a formal mortgage offer, but it shows estate agents and sellers that you're a serious buyer.
An AIP typically lasts between 30 and 90 days and is not legally binding. It gives you an estimate of what you could borrow and helps to narrow your property search within a realistic budget.
There are several key reasons why an AIP is beneficial for UK homebuyers:
To get an AIP, you'll typically need to provide:
At Friends Capital Ltd, our advisers can compare AIPs across multiple lenders and help you understand which one best suits your circumstances — all without impacting your credit score in many cases.
It depends on the lender. Some lenders carry out a soft credit check, which won’t affect your credit rating. Others may perform a hard credit check, which can leave a mark on your file.
Our mortgage experts will help you find lenders who use soft checks if you're early in your property search or planning to get multiple AIPs.
An Agreement in Principle is a conditional statement based on limited information, while a formal mortgage offer comes after a full mortgage application, including full documentation, income verification, and property valuation.
Most AIPs are valid for 30 to 90 days. If your circumstances change — such as income, debts, or spending — or if the period expires, you may need to obtain a new one.
Yes, it’s possible. An AIP is based on preliminary checks. If your financial circumstances change, or if further checks reveal issues (like credit problems or affordability concerns), the lender may decline your full mortgage application.
This is why it’s important to speak with an adviser who understands the market and can help prepare your full application for success.
Not always, but many estate agents prefer or require buyers to have one before scheduling viewings, especially in competitive markets.
Yes, the terms are used interchangeably by most UK lenders.
Technically yes, but having an AIP significantly strengthens your position and makes your offer more credible.
With the right information, you can often receive an AIP within 24 hours. At Friends Capital Ltd, we aim to get you pre-approved quickly and efficiently.
Getting a Mortgage Agreement in Principle is an important first step on your homebuying journey. Whether you're a first-time buyer, moving home, or exploring your mortgage options, our team at Friends Capital Ltd is here to help.
Our expert mortgage advisers will guide you through the process, compare options across the market, and help you understand which lender and product is best suited to your needs.
Get in touch today to get your Agreement in Principle sorted and take the first confident step towards your new home.