The Agreement in Principle, explained
An Agreement in Principle (AIP) is a lender’s initial indication of how much it may lend you, based on a soft check of your circumstances. It lets you view and make offers with confidence — and for contractors, getting it from a lender that already understands day-rate income avoids wasted searches.
What an AIP is
Also called a Decision in Principle, an AIP is a lender’s early statement that it would, in principle, lend you a certain amount, subject to full checks. It isn’t a formal mortgage offer, but it shows estate agents and sellers you’re a serious, credible buyer.
Why contractors should get one first
For contractors, the AIP is also a test of placement. Obtained from a lender that assesses contract income correctly, it gives a realistic figure to view against. Obtained carelessly from a lender that misreads your income, it can produce a low number — or a needless hard credit footprint.
- Confirms a realistic budget before you view.
- Strengthens your position when you make an offer.
- Helps avoid falling in love with a home outside range.
Credit and validity
Most AIPs use a soft credit check that doesn’t affect your score; the full application later involves a hard check. An AIP typically lasts around 30 to 90 days and can usually be renewed.
- An AIP is an indication, not a formal offer.
- Get it from a contractor-friendly lender for a realistic figure.
- Usually a soft check — no impact on your score.
- Typically valid ~30–90 days, and renewable.
Process, answered
Does an Agreement in Principle affect my credit score?+
Most use a soft search that isn’t visible to other lenders and doesn’t affect your score. The hard check comes at full application — which is why you don’t want multiple careless AIPs.
How long does an AIP last?+
Typically around 30 to 90 days depending on the lender, and it can usually be renewed if your search takes longer.
Is an AIP a guarantee of a mortgage?+
No. It’s an indication based on initial information. The formal offer follows full underwriting, including verification of your contract income and a property valuation.