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Understanding Mortgage Agreement In Principle: A Guide for Home Buyers

Updated: Feb 15

Understanding the home buying process can feel overwhelming when you're a first time buyer or home mover. While all the paperwork and steps involved may seem daunting, having a basic understanding of key aspects like Agreement in Principles can help make things less stressful. An Agreement in Principle (AIP) is an important preliminary step that lets you know how much you could potentially borrow before moving forward with an offer on a property. In this post, we explain in simple terms what an Agreement in Principle is, how to apply for one, what information lenders will review, and how it can help simplify your home search. Our goal is to break down this mortgage terminology and process to help you feel more informed and prepared as you navigate your property purchase journey.



What is a Mortgage Agreement in Principle?

A Mortgage Agreement in Principle is a written estimate from a bank or building society that provides you with an indication of how much you can borrow. You can obtain this either from your mortgage broker or from your bank / building society if that is your preferred route.

What are the Benefits of an AIP?

An AIP is a great first step for buyers looking to purchase a property. Having one can bring peace of mind not only when you begin your search, but also when you are ready to make an offer. Estate Agents and sellers alike will appreciate that you have this agreement in principle since it demonstrates financial stability and that you are serious about purchasing a property.

Will I Receive Anything in Writing?

After receiving the green light with your mortgage AIP, you can expect to receive a certificate from the lender that provides evidence of your readiness to move forward. This document, often referred to as a Mortgage AIP Certificate, is helpful evidence when meeting with an estate agent or seller.

How do I Obtain an AIP?

You will need to share your details with your mortgage broker (or your bank / building society if this is your preferred route), which should include providing all your documents beforehand too. By providing your documents early into the process will ensure that you are in the best position possible for approval and that nothing has been overlooked. (we’ve often seen mortgage decisions change / retracted when documents have been provided further down the line, so avoid falling foul of this by supplying everything upfront)

How Long Does an AIP Last?

Most lenders offer their AIP’s for between 30 and 90 days. However, all is not lost if yours runs out, providing there have been no changes to your income or expenditure your AIP can generally be updated with relative ease.

Can an AIP be Withdrawn?

When applying for a loan, an AIP can give you an indication of the amount that might be available to borrow. However, it’s important to remember that changes in circumstances could affect your application – such as having fewer funds saved up or switching jobs. Make sure all your information is current and accurate if you want the best chance of success.


Prospective homebuyers with their mortgage agreement in principle, standing ready to embark on property viewings. The mortgage agreement in principle serves as a testament to their readiness and serious intent, enabling them to move swiftly in the competitive housing market. It's not merely a ticket to view homes, it's a significant step towards homeownership.
Ready to view with AIP in hand!

What Happens if My AIP is Declined?

Do not worry if you are rejected by a lender. They all vary and operate their own individual credit score process, so where one lender may not support you it is likely that another will. It’s always best practice to keep an eye on your credit file and there are several agencies that the lenders use when reviewing your past history, most notably Equifax, Experian, CheckMyFile and ClearScore being the most used.

Will Applying for an AIP Affect My Credit Rating?

It’s important to be aware that if you decide to get an AIP, it could affect your credit score. This is because a form of check – either ‘hard’ or ‘soft’- usually has to take place in order for the application process to be complete. Whilst lenders and mortgage advisers may use soft checks so as not leave any visible trace on your records, applying several times within a short space of time can still have an adverse effect on your credit rating.


Understanding the difference between soft and hard credit searches can be an important part of managing your finances. Soft checks are done by lenders to assess eligibility for specific products, which you will be able to see on your own report but have no effect on your score. On the other hand, a hard search occurs when submitting an application for a loan or credit – it is visible to everyone and may temporarily reduce your rating (depending how often you borrow). So think carefully before taking out any loans!

How Does My Credit Score Affect My AIP?

Your credit score is more than just a number – it’s an indicator of your financial reliability. It can be the difference between getting accepted on favourable rates on loans and being turned away, so taking steps to keep yours high pays off in the long run.

How Can I Improve My Credit Score?

Your credit score is strongly impacted by how you manage your money and debts – for better or worse. Positive actions such as paying bills on time, establishing a good relationship with lenders, and being registered to vote can all play an important role in ensuring that your financial profile reflects healthy borrowing behaviour. On the flip side; missing payments, defaults or other delinquent activities could have significant implications when it comes to obtaining new lines of credit further down the road.

In conclusion, a mortgage agreement in principle (AIP) is an essential step in the home buying process for anyone looking to secure a mortgage. By understanding what an AIP is and how to obtain one, you are setting yourself up for success when it comes time to make an offer on your dream home. Working with a mortgage broker can greatly simplify the AIP process, as they have the expertise and resources to guide you through it smoothly. Remember, an AIP is not a guaranteed offer of a mortgage, but it does provide valuable insight into your borrowing potential and can give you an advantage in a competitive housing market. Keep in mind that improving your credit score before applying for an AIP can also increase your chances of approval and potentially lower your interest rates.


So why wait? Get in touch with us today to discuss how we can help secure your mortgage AIP and put you one step closer to owning your own home. Your dream of homeownership is within reach, and we are here to help make it a reality.


Just about to make an offer on a property? Check out My Offer Has Been Accepted, What Happens Next? for some top tips.


Published by Beechwood Mortgages Ref: 219335 with review and approval from Stonebridge Mortgage Solutions Limited who is authorised and regulated by the Financial Conduct Authority Ref: 454811.

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