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AIPs (agreement in principle) and DIPs (decision in principle) – what are they and what is involved?

This guide was last updated 8 November 2022

Most of us think that applying for a mortgage is like filling out one long form but for most lenders, applying for a mortgage is a two-stage process.

The first part of the mortgage application process

Initially, the lender will assess whether they can lend you money in the first place, based on a credit score. They base the score on all the answers that you give them and the information they get from credit reference agencies like Experian and Equifax. If the total points are enough, then you will be agreed for a mortgage. This is called an Agreement In Principle (AIP) or a Decision In Principle (DIP). Most AIPs and DIPs will also assess how much you can borrow based on what you declare to be your income and expenditures.

The second part of the mortgage application process

The second part of a mortgage application is confirmation of a lot of information like property and solicitors details but it is also the point at which you get to state which mortgage product you want e.g. a fixed rate for five years. Once you have completed both parts, you will have submitted the Full Mortgage Application (FMA).

For those buying properties as opposed to switching lenders (remortgaging), a DIP or AIP is what estate agents sometimes ask to see to check you have a mortgage agreed before their vendor accepts your offer.

It is a good idea to get an AIP or DIP before you put an offer on a property and it is important to know that each time you apply to a lender for a DIP or AIP, the system will carry out a credit search from one or more of the credit reference agencies.

That search might not be visible to other companies but it will show on your credit file for you to see. If you continue beyond the first stage to submit a full mortgage application, then that credit search will be made visible to all.

DIPs and AIPs are technically valid for 30 days as that is when most credit reference agencies will have updated their records.

Independent mortgage brokers have access to dozens of lenders’ systems and can carry out DIPs, AIPs, and FMAs with nearly all of them. Whatever your situation, they can approach lenders on your behalf quickly without you having to visit any of them.

If you would like to know if you would be accepted and how much you could borrow then give us a call on 020 7220 5110 or fill out the form below to arrange a no obligation chat!

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    Andrew Montlake

    Written by Andrew Montlake

    Andrew Montlake, better known as Monty, began his journey with an Hons degree in Economics & Politics before starting in the mortgage industry in February 1994. As a main founder of Coreco in 2009, he successfully grew the brand, marketing, and communications, and was made MD in 2019 focussing on the overall vision, strategy, and culture of the company. As Coreco’s media spokesperson, Andrew can often be seen or heard on TV and radio as well as regularly commenting in the national, local, and trade press. He is the author of this acclaimed Mortgage Blog and is well-known for his social media, podcasts, and public speaking. Andrew is now proud to serve as Chairman of the Association of Mortgage Intermediaries, (AMI) as a cheerleader for the Mortgage Industry as a whole and continues to work at the coal face, writing mortgage business and advising clients.

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