Agreement in Principle as a First-Time Buyer

If you're considering buying a home and applying for a mortgage, one of the first things you should do is get an Agreement in Principle to check your affordability.

Getting Agreement in Principle early can save time, reduce stress, and make your home buying journey much smoother, especially if you're a first-time buyer!

If you are looking to get an Agreement in Principle as a first-time buyer, call our mortgage brokers in Wembley on 020 3813 7800 for expert guidance.

Table of Contents

What is an Agreement in Principle?

An Agreement in Principle (AIP), sometimes called a Decision in Principle (DIP), is a document from a mortgage lender indicating how much they might be willing to lend you for a mortgage based on a preliminary assessment of your financial situation.

It gives you a clear idea of your borrowing limit and helps you confidently start looking for properties within your budget.

An Agreement in Principle (AIP) is also known by other names, including:

• Decision in Principle (DIP)
• Mortgage in Principle
• Mortgage Promise
• Lending Certificate

An Agreement in Principle is not a full mortgage offer but a useful step showing sellers and estate agents that you're serious and capable of buying a property.

How Does an Agreement in Principle Work?

To get an Agreement in Principle, you typically provide the lender with some basic information about your finances, like your income, monthly outgoings, and credit history.

The lender then performs a soft credit check (which won't affect your credit score) and estimates the mortgage amount you could be approved for.

The Agreement in Principle usually lasts for about 30 to 90 days, giving you a window to search for properties within your budget.

Why First-Time Buyers Need an Agreement in Principle

An Agreement in Principle gives first-time buyers an idea of what they can afford, helping them set a realistic budget before they begin their property search.

1. Shows Sellers You're a Serious Buyer

In a competitive housing market, sellers prefer financially prepared buyers. Having an Agreement in Principle proves you've taken the initial steps with a mortgage lender, which can give you an edge over other buyers without one.

2. Helps You Understand Your Budget

An Agreement in Principle sets clear expectations on what you can realistically afford. This helps first-time buyers avoid falling in love with properties outside their price range, saving time and disappointment.

3. Speeds Up the Mortgage Process

When you find a property you want, having an Agreement in Principle means you're already partway through the mortgage application process. This can speed up the final mortgage approval, making your offer more appealing to sellers.

4. Gives You Confidence in Your Property Search

Knowing your borrowing limit lets you focus your house hunting on properties that fit your financial profile. This focused approach reduces stress and helps you make better decisions.

How Mortgage Brokers Can Help You Get an Agreement in Principle

Getting an Agreement in Principle (AIP) can feel a bit overwhelming, especially if you're a first-time buyer or unsure where to start. That's where a mortgage broker comes in.

Our friendly and expert team of mortgage brokers in London will guide you through the process step by step. We'll take a look at your finances, explain how much you might be able to borrow, and find a suitable lender who's likely to approve your Agreement in Principle.

We know which lenders are more flexible and which ones are fit for your specific situation, whether you're self-employed, have a limited credit history, or just want the best possible deal.

Our mortgage brokers also handle the paperwork and make sure your Agreement in Principle application is submitted correctly, helping you avoid delays or rejections. With the right support, you'll be in a stronger position to start house hunting, knowing exactly what your budget looks like.

In short, a mortgage broker can save you time, reduce stress, and give you the confidence to move forward with your home-buying journey.

How Can First-Time Buyers Obtain an Agreement in Principle?

To get an Agreement in Principle, you'll typically need to provide some basic information about your income, expenses, and credit history. This can usually be done online, through a mortgage advisor, or directly with a lender.

Getting an Agreement in Principle as a first-time buyer doesn't usually involve a hard credit check, so it won't affect your credit score in most cases.

What Do You Need to Get an Agreement in Principle?

To get your Agreement in Principle, you'll need to provide some basic financial details, including:

• Your UK address history for the last 3 years
• Income details such as salary, bonuses, pensions, benefits, or investments
• Information about any existing credit cards, loans, or finance agreements
• Details of your regular monthly outgoings, like travel costs, childcare, or school fees
• Your National Insurance number

Supplying this information helps the lender quickly and accurately estimate how much they could lend you.

Can a Mortgage Broker Help First-Time Buyers Get an Agreement in Principle?

Yes, working with a mortgage advisor for first-time buyers can make the process of obtaining an Agreement in Principle much easier. An experienced advisor can assess your financial profile, match you with the right lender, and explain the next steps clearly. They can also help you transition smoothly from Agreement in Principle to full mortgage application when you're ready to move forward with a purchase.

How mortgage brokers help first-time buyers get an Agreement in Principle

Getting an Agreement in Principle (AIP) is an important early step in the home-buying process, and working with a mortgage broker makes this process much easier.

Here is a step-by-step process of getting your Agreement in Principle quickly and smoothly with the help of a mortgage broker.

Step 1: Speak to a Mortgage Broker

To begin the process of getting your Agreement in Principle, call Infinite Finance London on 020 3813 7800 for a free, no-obligation consultation.

Our mortgage broker will ask you a few questions about your income, job, savings, and what kind of property you're looking to buy. This helps us understand your financial situation and what's realistic for you.

Step 2: Share Your Financial Details

Gather all your financial documents and share them with your mortgage broker for a preliminary assessment of your financial situation. They will need some basic information, like your income, monthly expenses, any existing debts, and how much deposit you have saved. This helps them work out how much you could potentially borrow. You might be asked to provide documents like payslips, bank statements, or proof of ID.

Step 3: The Broker Finds the Right Lender

Our mortgage broker will search the market to find a lender that suits your financial profile and goals. This could be a high street bank, a building society, or a more specialist lender if needed.

Step 4: Application for the Agreement in Principle

Once our broker has found a good match, we'll apply for the Agreement in Principle on your behalf. We handle all the paperwork and make sure everything is submitted correctly, saving you time and stress. Some lenders may run a soft credit check at this stage (which doesn't impact your score), while others may do a hard check.

Step 5: Receive Your Agreement in Principle

If your application is successful, you'll typically get your Agreement in Principle within a few hours or the next day, outlining the amount you might be able to borrow. This agreement usually lasts from 30 to 90 days.

Step 6: Start House Hunting with Confidence

With your Agreement in Principle in hand, you can view properties knowing exactly what you can afford, and estate agents will see you as a serious buyer.

How Long Does an Agreement in Principle Last?

Most Agreements in Principle are valid for between 30 and 90 days, depending on the lender. If your Agreements in Principle expires before you find a property, you can usually request a renewal.

For first-time buyers in the UK, it's advisable to get your Agreement in Principle shortly before you start seriously viewing homes. This ensures your figures are up to date and aligned with your current financial situation.

Does an Agreement in Principle Help First-Time Buyers Stand Out?

Yes, absolutely. In competitive markets, sellers are more likely to accept offers from buyers who already have an Agreement in Principle. It proves you've done your homework and have the financial backing to proceed with a purchase.

For first-time homebuyers, this small step can give you a real advantage, especially if you're up against other interested parties who haven't secured an Agreement in Principle yet.

Is Getting an Agreement in Principle a Guarantee of a Mortgage?

While an Agreement in Principle is a helpful indication of how much you can borrow, it's not a formal mortgage offer. The lender will still need to carry out more detailed checks before officially approving your mortgage. However, it does boost your credibility and strengthens your offer when viewing properties. For first-time home buyers, it's an important document to have ready when starting your property search.

Is an Agreement in Principle the Same as a Mortgage Offer?

No, an Agreement in Principle is not the same as a mortgage offer. Think of the Agreement in Principle as a “pre-approval” based on limited information, like your income and credit history. It indicates how much you could borrow, but it is not a guarantee.

A mortgage offer is the full, formal approval from the lender once they've completed detailed affordability checks and assessed the property you want to buy. Only after this full process will you receive a mortgage offer confirming the exact loan amount.

Will Getting an Agreement in Principle Affect My Credit Score?

Most lenders perform a soft credit check, which does not impact your credit score. However, if you apply for multiple Agreements in Principle, some lenders may perform a hard credit check, which could affect your credit.

What Happens After You Get an Agreement in Principle?

Once you have your Agreement in Principle, you can confidently start searching for homes within your budget. It also means that when you make an offer on a property, you can show sellers or estate agents proof that a lender is willing to back you financially. This can make your offer more attractive, especially in competitive markets.

When you find your dream home, the next step is to complete the full mortgage application. This involves more detailed checks and a property valuation before you receive a formal mortgage offer.

Get an Agreement in Principle Today

Call Infinite Finance London on 020 3813 7800 to book your free consultation and get your Agreement in Principle sorted, fast, friendly, and hassle-free.