Approval in Principle
What is a mortgage Approval in Principle?
In short, an Approval in Principle (AIP), is a letter from your Banking/financial institution showing the sum of money they are willing to lend you, if all the information you have submitted is correct . It’s free to get an AIP and generally valid for six months. Under circumstances it can also be extended.
How to get an Approval in Principle
In order to obtain an (AIP), your chosen banking/ financial institution or broker will request information such as:
- Six months’ worth of statements for ALL bank accounts and credit cards
- Mortgage/any loan statements
- At least three months’ payslips
- P60
- Salary certificate stamped by your employer
- Tax returns and accounts for two years (self-employed)
- Tax clearance cert if you are self-employed
- PPS numbers for all applicants
- Passport/Driving licence
- Utility bills (proof of address)
Your bank may require more documents but those listed above are worth getting together in advance.
Generally, this process is quick and a decision is made within 2 weeks and you’ll know what amount you will be in a position to borrow.
What happens if you don’t get approved?
If you don’t get approval, your banking/financial institute can share these reasons and help you understand the areas for improvement. Being rejected for (AIP) doesn’t put a stop to buying your new home, and it’s important to understand why your initial submission was declined before trying for another. Being refused for a mortgage does not impact your credit rating.
Want to know more? Visit the Quintain Home Buyer’s Guide here.
