Agreement in Principle and Soft Credit Searches

During your mortgage process, you will have to pass your mortgage lenders affordability checks, credit searches and prove your income. Once you have done this, you will obtain an agreement in principle (also known as an AIP).

Having an agreement in principle will not only demonstrate that a mortgage lender is willing, in principle, to let you borrow the funds, but it can also be incredibly useful when negotiating on the asking price of a property, as the seller now knows that you are a serious buyer and ready to go.

How does your agreement in principle affect your credit score?

The way in which an agreement in principle could affect your credit score, depends on the type of credit search that the mortgage lender takes out. There are two main types of credit search that they will use; Hard Searches and Soft Searches.

Soft Credit Searches

Nowadays, mortgage lenders will much more frequently carry out a soft credit search over a hard credit search. Soft credit searches will generally be less detailed than a hard search, though they are still typically a good indication that your application could be accepted, if you do obtain an AIP from this.

Typically speaking, a soft credit search will not leave a credit footprint, meaning your credit score should not be affected by having these taken out.

Hard Credit Searches

Hard credit searches will be a lot more in-depth than soft searches. The main difference between hard and soft searches is that a hard credit search can affect your credit score, as it will leave a footprint. Anyone looking at your credit file will be able to see if you have one.

If you have a good credit score, you will generally be unaffected, though if you have a lower credit score, you could have problems. The reason for this, is that if you have a poor credit score and have multiple hard searches on file, it can look like you are trying to apply for lots of credit at once.

This is more than likely going to put off a mortgage lender.

Does an agreement in principle guarantee a mortgage in Hull?

You will never be guaranteed to obtain a mortgage. That being said, having an agreement in principle in place ahead of time will certainly work in your favour. Once you provide the lender with all your documents, an underwriter will review everything and make a final decision.

Agreements in principle will typically include lots of small print that home buyers, especially first time buyers in Hull, can easily miss. It’s reasons like this why you would benefit from speaking to an open and honest mortgage broker in Hull.

When customers get in touch with us for help about their agreement in principle, we find that in some cases they’ve been turned away at full mortgage application stage.

The documents that a customer will require include, but are not limited to, your ID, payslips and bank statements. As a fast & friendly mortgage broker in Hull, we take pride in helping you to prepare for your journey ahead.

If you are looking at starting your mortgage process, you may need to look at how to get prepared for a mortgage in Hull.

It’s necessary to have your agreement in principle in place when making an offer. Most credible estate agents will want you to provide evidence that you are able to proceed with your property purchase.

How long will my agreement in principle last for?

Normally, your agreement in principle will need to be renewed after around 30-90 days. As an experienced mortgage broker in Hull, we still recommend getting one as early as you can.

The reason why we would suggest this, is so that you can avoid disappointment if you were to find a dream property, only to not have this in place and potentially fall behind another home buyer who has their offer accepted instead.

Always remember, you don’t always need to buy the first house you see after you get your agreement in principle. It’s a simple process, so if it does happen to expire, you can just obtain another.

You may be a first time buyer in Hull or you might be thinking of moving home in Hull and are looking for mortgage advice in Hull. If so, we think that you will benefit from our dedicated mortgage advice services in Hull.

We offer a free initial mortgage appointment with one of our expert mortgage advisors, so feel free to book online today and we will see how we can help you!

Last edited 25/08/2022