Agreement in Principle (AIP)

An agreement in principle is a preliminary mortgage approval indicating the lender's willingness to provide financing up to a specified amount, subject to property valuation and final underwriting verification.


AIP CharacteristicsDetails
Validity period30-90 days typical
Binding statusNon-binding on lender
Credit checkSoft inquiry, minimal score impact
DocumentationBasic income and identity verification
Information ProvidedSpecification
Maximum loan amountBased on income and DBR
Indicative interest rateSubject to final approval
Loan term options15-25 years typical
ConditionsOutstanding requirements listed
Strategic ValueBenefit
Negotiating positionDemonstrates serious buyer status
Budget clarityConfirms purchasing power
Property searchNarrows viable price range
Offer strengthIncreases seller confidence

Related Terms

Mortgage (Residential)Green MortgageCommercial MortgageMortgage CapMortgage InsuranceMortgage TermMortgage Processing FeeMortgage (Residential)Buy-to-Let MortgageMortgage InsurancePre-Approval (Mortgage)Pre-Approval (Mortgage)Loan-to-Value (LTV) Pre-Approval LetterFinal ApprovalCredit Score Mortgage RequirementsFinal Approval

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