Agreement in Principle

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Agreement in Principle (Part 1)

Paul Collinson explains an Agreement in Principle and why they are an important step in the home buying process.

What is an Agreement in Principle (AIP)?

An Agreement in Principle is called many different things. It’s also known as a Decision in Principle (DIP), or a Mortgage Promise or Approval in Principle. They’re all the same thing.

Basically, they’re not a promise that an applicant will get a mortgage, as this would be fully assessed by an underwriter on full mortgage application when you actually find a property.

An AIP or DIP is something that we will do after checking affordability. It is a document that a lender would give to you saying that a certain amount of borrowing is achievable. Initially, we would ask about any credit issues, as that may affect the amount that you could borrow on a mortgage.

What should I do if my estate agent is asking to see my Agreement in Principle? How do I get one?

Contact us here at Brick 2 Brick – we’ll assess your income and commitments and any dependents that you have. Then we’ll be able to help you out with an Agreement in Principle, once we’ve found out what that maximum borrowing amount will be.

Do I have to have an Agreement in Principle through the estate agent I’m looking to purchase through?

No, you don’t. We could get one of those for you. Some agents could be a bit pushy in getting you to use multiple services, but nothing is compulsory.

We’ll be able to do the Agreement in Principle for you and that should be sufficient.

How reliable is an Agreement in Principle and how long does one of these last?

They are pretty reliable as long as we’ve got the right information from the client. If we have correct details and there are no issues on your credit file, we are pretty certain that the lender will be able to give you that amount.

With some lenders, the Agreement in Principle will last 30 days, with some it’s 60, and a couple will go to 90 days.

Can I make an offer with an Agreement in Principle?

Some estate agents do need one of those before putting your offer forward, while others won’t ask for one. With an Agreement in Principle, it means you’re putting forward a solid offer, and it could give you more power over somebody that hasn’t got one.

Does an AIP or an Agreement in Principle mean you’ll get a mortgage?

It doesn’t mean you’ll get a mortgage. That would be fully assessed by the underwriter on the full application. An AIP is just something we’ll do after checking the affordability, to confirm that a certain amount is achievable.

Will I need a credit check and does an Agreement in Principle affect my credit score?

You would need a credit check, but a Decision in Principle would not affect your credit score.

For a credit check, we use a company that looks at three different credit agencies, the ones that all the lenders tend to look at. Each lender looks at different agencies.

If you tell me that you haven’t got any credit issues, so there are no missed payments or late payments on your file, you won’t need one of those credit checks – as long as that’s correct information.

But if you think there may be certain blips on the credit file or you’re unsure about what’s on there, I will need to see that file. I need the correct information to be able to help you.

A Decision in Principle doesn’t really affect the credit score because it’s a soft search, which will show on the credit file for you to see, but lenders won’t be able to see that.

How do I apply for an Agreement in Principle and how long does it take?

Come to us and we’ll be able to sort everything out for you in-house. It should just take around 30 minutes.

What else do we need to know about getting an Agreement in Principle?

It just involves a free initial consultation. We look at the whole picture to ascertain what the maximum amount is you’ll be able to borrow. That’ll enable you to know what value properties to start looking for.

We’ll get the Agreement in Principle ready for when you do find a property and put an offer in. When that’s accepted, we’ll find the most suitable deal for you and then process the mortgage application.

Hopefully it will all go as smoothly as possible through to completion day – the day that you move in.

YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.

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Agreement in Principle (Part 2)

Paul Collinson is back to continue the conversation about an Agreement in Principle. Episode two of two, recorded in August 2025.

When should I get an Agreement in Principle?

We can get that right at the very beginning, after we’ve found out your maximum borrowing potential – the maximum amount you can borrow.

An Agreement in Principle normally gives you more power when you put in a property offer with an estate agent. We can do that early on to ensure that everything is in line for you.

What information do I need to get an Agreement in Principle?

We would go through all the facts – including three years’ address history, one year’s employment history and details of any commitments or any dependents that you have.

We’d then seek proof of your income and address. We then put those details in and get the Agreement in Principle for you.

How is affordability calculated for an Agreement in Principle?

Firstly, we would check affordability on the lender’s calculators. If it all fits, we would do an Agreement in Principle. Affordability is calculated using the lender’s income multiples – and they also take on board your commitments.

All lenders assess this in different ways. Some are harsher on commitments than others, and some are more lenient on the amount they will lend based on their income multiples.

We deal with nearly 100 lenders, so we would check all of them as each will assess the affordability in different ways.

Is an Agreement in Principle guaranteed? Can my mortgage be declined after an Agreement in Principle?

It’s not guaranteed. A mortgage is always subject to the underwriter’s full assessment, once the full application has been submitted. It can be declined at this point. It’s unlikely and doesn’t happen very often, but sometimes the underwriters might pick things up.

For an Agreement in Principle lenders don’t check everything. They don’t look at all the documents – just the income, commitments and your credit file, so sometimes things come up that weren’t obvious in the initial stage.

Can I get an Agreement in Principle if I’m a First Time Buyer?

Yes – and also if you’re a home mover or even remortgaging. You can get an Agreement in Principle for any of these.

How will bad credit affect an Agreement in Principle?

In a big way – the credit file is the main thing that is looked at when you apply for an Agreement in Principle. Obviously, if there are any credit issues we can advise on ways to repair that.

Is it harder to get an Agreement in Principle if I’m self-employed?

No. The income that we assess is just done in a different way, depending on whether you’re a sole trader or a limited company. It isn’t harder, it’s just different.

I’ve been declined an Agreement in Principle. What can I do?

You can speak to us and we’ll have a look at the credit report and your details as a whole. We can advise you on where else we could go with it or what you need to do to repair the situation.

What are the benefits of getting an Agreement in Principle with a mortgage broker?

It can be quicker, and we offer the complete mortgage package to help you along the way. If there are any issues, we can guide you in the right direction.

YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP WITH YOUR MORTGAGE REPAYMENTS.