HomeBuyers Corner

Getting Ready to Buy

Mortgage Agreement in Principle (AIP)

A Mortgage Agreement in Principle is an important first step in your home buying journey. It gives you an indication of how much you could borrow and shows sellers you're a serious buyer.

What is a Mortgage Agreement in Principle?

A Mortgage Agreement in Principle (AIP), also known as a Decision in Principle (DIP) or Mortgage Promise, is a certificate or statement from a lender that shows how much they might be willing to lend you based on some basic information about your income, expenses, and credit history.

It's important to note that an AIP is not a guaranteed mortgage offer, but rather an indication of what you might be able to borrow if you meet the lender's full criteria during a complete mortgage application.

Why Do You Need One?

Shows estate agents and sellers you're a serious buyer
Gives you a realistic idea of your budget before house hunting
Can speed up the mortgage application process later
Helps identify any potential issues early in the process
Makes your offer more credible to sellers

When Should You Get an AIP?

The best time to get an AIP is before you start viewing properties. Most AIPs are valid for between 60 and 90 days, giving you plenty of time to find a property. If it expires, you can usually get another one.

⚡ Pro Tip: While it's important to have an AIP before making offers, don't get one too early if you're not ready to start viewing properties, as each application might leave a footprint on your credit file.

How to Get an AIP

You can get an AIP directly from banks or through a mortgage broker. Here's what you'll need:

Personal Information

Personal details (name, DOB, address)
Three years of address history
Current employment details
Bank account details

Financial Information

Annual income and salary details
Any additional income sources
Monthly outgoings
Existing credit commitments

Important Considerations

An AIP typically leaves a "soft" or "hard" credit search on your file - check with the lender which they use
Multiple credit searches in a short period can affect your credit score
The actual mortgage amount offered may differ from the AIP
Some estate agents may have preferred mortgage brokers or lenders - but you're not obliged to use them
Different lenders may offer significantly different amounts - it's worth shopping around

Next Steps After Getting an AIP

Start viewing properties within your confirmed budget
Keep your financial situation stable - avoid taking on new debts
Save all documents used for the AIP - you'll need them for the full application
Begin researching conveyancers and property surveyors
Consider setting up property alerts on major property websites