Agreement in Principle: What Is It and How to Use an Agreement in Principle Platform?
If you`re in the process of purchasing a property, you`ve probably heard the term “agreement in principle.” But what exactly does it mean? An agreement in principle (AIP) is a document that shows how much a lender is willing to lend you before you make an offer on a property. It`s a good way to show sellers or estate agents that you`re serious about buying a property, as you`ve already got a mortgage offer in principle.
But how do you get an agreement in principle, and why is it important? In this article, we`ll explain everything you need to know about agreement in principle and show you how to use an agreement in principle platform.
What is an agreement in principle?
An agreement in principle is a statement from a lender that they`re willing to lend you a certain amount of money based on basic information about your income and credit history. It`s not a formal offer of a mortgage, but it`s a good indication of how much you can borrow and shows sellers that you`re a serious buyer.
Why is an agreement in principle important?
An agreement in principle is important for several reasons. Firstly, it shows estate agents and sellers that you`re a serious buyer and have the means to buy the property you`re interested in. Secondly, it helps you understand how much you can afford to borrow and how much you`ll need to save for a deposit. Finally, it gives you an idea of the interest rate you can expect to pay and helps you compare mortgage deals.
How do you get an agreement in principle?
To get an agreement in principle, you need to apply to a lender or use an agreement in principle platform. You`ll need to provide basic information about your income, employment status, and credit history. The lender will then check your credit file to see if you`re eligible for a mortgage and how much they`re willing to lend you.
Once you`ve got an agreement in principle, it`s valid for several months, so you can take your time looking for a property and making an offer.
How to use an agreement in principle platform?
An agreement in principle platform is a tool that allows you to get an agreement in principle online without having to visit a lender in person. There are several platforms available, and they all work slightly differently. Some will ask you to fill in an online form with your basic details, while others may require you to upload documents like payslips and bank statements.
Using an agreement in principle platform is a good way to get an idea of how much you can borrow and which lenders are willing to offer you a mortgage. It`s also convenient, as you can get an agreement in principle from the comfort of your own home.
Conclusion
An agreement in principle is an important document when you`re buying a property, as it shows sellers and estate agents that you`re a serious buyer. Getting an agreement in principle is easy and can be done either by visiting a lender in person or using an agreement in principle platform. If you`re interested in buying a property, getting an agreement in principle is a good first step and will help you understand how much you can borrow and what mortgage deals are available.