What Does an AIP Actually Mean?
Mortgage Advice Washington & Sunderland
If you’re looking to buy a home soon, you’ve probably heard the term AIP. But what does it actually mean, and how important is it?
At Fairway Mortgage Advice, this is one of the most common questions we’re asked by first-time buyers and home movers. Let’s break it down for you!!
What Is an AIP?
An AIP is an agreement in principle, and is sometimes called a decision in principle (DIP). This document is a statement from a lender confirming how much they may be willing to lend you.
Your AIP is based on:
Your income
Your credit profile
Your basic financial information
It’s really important to remember that an AIP is not a full mortgage offer but it’s a really good indication of what to expect.
Does an AIP Guarantee a Mortgage?
No, an AIP doesn’t guarantee a mortgage and this is where confusion often happens.
Instead, an AIP:
Shows what you could potentially borrow
Demonstrates you’ve passed an initial credit check
Makes you more credible to estate agents
But it is still subject to lots of things, such as full underwriting, proof of income, bank statements and a lender’s property valuation.
For buyers in competitive areas of Sunderland or Washington, having an AIP in place before viewing properties can make a big difference.
Does an AIP Affect Your Credit Score?
This depends on the lender. Some lenders carry out a soft credit check, which doesn’t affect your score. Others may carry out a hard credit search, which will show up on your credit score. This is why getting advice first is important, especially if you’ve had previous credit issues.
How Long Does an AIP Last?
Most AIPs last between 30 and 90 days, depending on the lender. However, if it expires, it can usually be refreshed, but your circumstances must still meet the lender’s criteria.
Do You Need an AIP Before Making an Offer?
In most cases, yes but it really varies between estate agents. Most estate agents in Washington and Sunderland will often ask to see an AIP before:
Booking serious viewings
Marking a property as “Sold STC”
Accepting your offer
However, even if an estate agent doesn’t require this it’s always a good idea to have an AIP in place. It means you can have a clear idea how much you can actually borrow, as well as making you look more desirable to sellers as it shows you’re financially prepared.
When Should You Get an AIP?
Ideally you should get an AIP before you start viewing properties.
It not only gives you a realistic budget, but it also gives you confidence when offering and a smoother buying process. It also helps avoid disappointment if affordability is lower than expected.
Whilst you may want to rush straight into viewings and not wait to get an AIP, you needn’t worry!! We can usually get an AIP processed very fast for you!
Need an AIP in Washington or Sunderland?
Whether you’re:
Or unsure where to start
We can arrange an AIP and explain exactly what it means for you, giving you a leg up with your offers and a realistic starting point for house viewings.
Get in touch with us to get started. 🫶🏻🏠
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We are a whole of market broker. Contact us today to discuss your options!
📳07442869863
📞0191 466 1304
📩info@fairwaymortgageadvice.co.uk
🖥️www.fairwaymortgageadvice.co.uk
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Your home may be repossessed if you do not keep up with the repayments on your mortgage. Not all buy to let mortgages are regulated by the financial conduct authority. You may have to pay an early repayment charge to your existing lender if you remortgage.