If you’re just starting your home buying journey, you’ve likely heard the term Agreement in Principle (AIP), also known as a Decision in Principle (DIP). But what does it actually mean, and why does it matter?
In this video, I’ll walk you through the basics of what an AIP is, why it’s a crucial first step, and how we help our clients get one sorted quickly and confidently.
👉 Watch the full video explanation on my YouTube
What is an Agreement in Principle?
An Agreement in Principle is a statement from a mortgage lender confirming, in theory, how much they would be willing to lend you based on the information you’ve provided. It’s not a formal mortgage offer, but it gives you a very strong indication of your borrowing power.
To get an AIP, the lender will usually run a soft credit check and review details like your income, outgoings, employment status and any existing debts.
Why Do You Need an AIP?
There are a few key reasons an AIP is worth getting early on:
- It gives you clarity. You’ll know what kind of budget you’re working with before you fall in love with a home that may not be affordable.
- It shows sellers you’re serious. In a competitive market, having an AIP can make your offer stand out, agents and sellers know you’re in a strong position to proceed.
- It speeds up the process. Once you’ve had an offer accepted, you’ll already have a lender on board and much of the groundwork completed.
At Zita Latham Mortgages, we always recommend securing an AIP before you start house-hunting in earnest. It can help you move forward with confidence, knowing you’re financially ready.
Does an AIP Guarantee a Mortgage?
Not quite. While an AIP is a good sign, it’s still based on limited information. A full mortgage application includes more thorough checks, such as verifying documents, a full credit assessment, and a property valuation. That said, if your circumstances haven’t changed and all the details check out, you’re in a good position to move ahead.
How Long Does an AIP Last?
Most Agreements in Principle are valid for around 30 to 90 days, depending on the lender. But don’t worry — they’re easy to renew or update if you need more time or if your circumstances change.
How We Can Help
Whether you’re a first-time buyer or getting back into the market, we’ll guide you through the entire process, including securing your Agreement in Principle. We’ll handle the paperwork, explain your options clearly, and make sure your case is presented in the best possible light to the lender.
We understand that buying a home can feel overwhelming at times, but you’re not alone. With honest advice, friendly guidance and practical support, we’re here to help you take that important first step with confidence.
🎥 Ready to learn more?
Watch our video: What Is an Agreement in Principle?
And if you’re ready to take the next step, get in touch with us today to get your Agreement in Principle in place.
Header Photo by RDNE Stock project / Pexels