Getting an Agreement/Decision in Principle (AIP/DIP)

Why securing an Agreement in Principle is a crucial step

Before you start making offers on properties, it’s essential to know what you can afford. An Agreement in Principle (AIP)—sometimes called a Decision in Principle (DIP), is a document from a mortgage lender stating how much they are willing to lend you in principle.

Having an AIP puts you in a stronger position when viewing homes and making offers. Here’s why.

What is an Agreement in Principle?

An AIP is a soft check by a lender that assesses your financial situation and estimates how much you could borrow. It isn’t a guaranteed mortgage offer, but it gives:

✔ Aclear idea of your budgetbefore you start house hunting.

✔Reassurance to estate agents and sellersthat you’re a serious buyer.

✔ A way tospot and fix potential issuesbefore making a full mortgage application.

Most lenders will issue an AIP within 24 hours, and some can provide one instantly online.

Do you need an AIP to view properties?

While not legally required, many estate agents won’t allow viewings unless you have an AIP. It proves you’re financially prepared and not wasting their time.

💡Tip:Some estate agents may prefer buyers with an AIP over those without, even if the offer is slightly lower, because they are seen as more reliable.

What documents do you need for an AIP?

Getting an AIP is simple, but you’ll need to provide:

•Your income details– Payslips or tax returns for self-employed buyers.

•Your outgoings– Regular expenses, debts, and financial commitments.

•Your credit history– Most lenders run a soft credit check, which won’t impact your score.

•Deposit details– How much you have saved and where it’s coming from.

Once submitted, your lender will assess your affordability and issue an AIP confirming how much they’d be willing to lend you.

How long does an AIP last?

An AIP typically lasts30 to 90 days, depending on the lender. If it expires before you find a property, you can renew it - though lenders may reassess your finances.

💡Important:Your circumstances should stay the same during this time.Avoid taking out new loans, credit cards, or big purchases, as these could affect your final mortgage approval.

What Open Moove suggests next

• Get an AIP before starting serious property searches as it makes you a stronger buyer.

• Compare different lenders or even better, speak to a mortgage broker to find the best deal.

• Ensure your financial situation remains stable to avoid any surprises later down the track.

• Download the Open Moove app to stay on track with your home buying journey and access expert guidance at every step.