Agreement in Principle Mortgage Advice in Coventry
First things first; What is a mortgage agreement in principle?
If you are a first time buyer in Coventry, you may not be aware of what a mortgage agreement in principle is. A mortgage agreement in principle (sometimes shortened to AIP or DIP – decision in principle) is an initial indication of what a lender may be prepared to lend based on the information provided, subject to a full application, supporting documents and property checks.
This shows both the estate agent and the person selling their home, that you are creditworthy as you have passed the lenders initial credit score. It’s important to remember though that this is not a guaranteed mortgage, as going for a full application will require even more in-depth background checks.
However, it is a good idea to get one done at the earliest opportunity for the following reasons:
- Negotiating Power
- Avoiding Disappointment
- Knowing Your Limits
Negotiating Power with a Mortgage Agreement in Principle
When you are at the point where you would like to make an offer on a new home, you’ll find that the majority of estate agents will undertake due diligence and ask you to provide them with proof that you do in fact have the means to proceed with the property purchase.
Your proof will usually come in the form of bank statements, but can also be done using an agreement in principle. This is something that we can provide for you, usually within 24 hours of your initial appointment.
Providing an Agreement in Principle can support your offer, but it does not automatically mean the property will stop being marketed. That decision rests with the seller and their estate agent.
Having an Agreement in Principle before making an offer can show the seller that you have considered how to fund the purchase. It remains an initial assessment, rather than an agreed mortgage.
This might persuade a seller to consider an offer you make that could possibly be under their asking price.
Avoid Disappointment with a Mortgage Agreement in Principle
When it comes to purchasing a new or additional home, some customers like to try and run before they can even walk. They charge ahead all guns blazing, making an offer on a property without actually making sure they can proceed in the first place.
If the application then goes ahead and fails, this can result in disappointment that could’ve been avoided. The last thing you want to be doing is having your heart set on a new family home and then feeling down when it doesn’t work out the way you had hoped.
This can all be prevented by getting in touch with us at an earlier stage. Sometimes there are factors that may cause an application to fail, that given time and care with the help of a mortgage broker in Coventry, can be solved over time.
An example of this is, let’s say you have a disputed mobile phone bill that keeps cropping up. This is something that can be sorted with the appropriate action. Some think they’re on the voters roll when they are not. Give it a few weeks and that can be sorted too.
In some cases you might not be able to get a mortgage at all. If that does happen to be the case, it’s better that you are made aware of that now rather than mess people about. One of our dedicated mortgage advisors will be able to tell you what you need to do to improve your credit-worthiness for the future.
Knowing Your Limits with a Mortgage Agreement in Principle
Let’s say in theory, you know that you have got a good credit rating and have never been turned down for credit, you’re registered on the voters’ roll and you’ve always kept up your monthly credit payments. What could possibly go wrong?
Well the truth is, you could approach 10 different lenders these days and get 10 different results from each of them! They all have their own lending criteria and calculate affordability in their own unique ways.
If you are Self Employed in Coventry it can be complicated further, as some lenders may take your net profit, whilst others are known to use your salary and dividends. In some cases, you’ll find that lenders may even use your latest year, whilst others prefer an average over 3 years.
Expert Mortgage Advice in Coventry
Being mindful of your borrowing limits is important as this will help you determine what your ideal price range will be. Our dedicated mortgage advice team will be able to advise you of the maximum mortgage available to you. Also, more importantly, together we’ll work out how much you can afford to pay back on a monthly basis.
Date Last Edited: October 21, 2026
