How accurate are agreements in principle?

[Sasha84]

Had an offer accepted on my first house today but I’m just wondering how accurate agreement in principles are?

At the bottom of mine it says that my agreement was confirmed based on my ‘credit search and score’ nothing has changed since then other than I have passed my probation period and saved more money but I’m just really nervous about starting the full application, especially with the recent interest rate rises, could this make them change their mind?

Following as in same situ

For the majority of agreement in principles, I think they only take into account income, so on the face of it, will likely tell you the maximum if 5 times (or whatever that particular lenders maximum multiple is).

When it comes down to the application, they will look at the ins and out of your finances, paying closer attention to regular outgoings/commitments. Mine included a deduction for childcare, even though my DC are only in for another year. They also disregarded any maintenance payments, as they are sporadic (to be fair, they were right to do that). Those 2 adjustments brought my maximum mortgage down by £20k, which I've had to utilise savings for.

I went direct to my bank for specific reasons, but if you can find a good broker, they will know what each lender accepts, and which will best suit your circumstances. The main fee for a broker usually comes from the lender, so you don't pay this directly, though you may have to pay something like £250 separately upfront.

@Starseeking thank you! I used a broker to apply for my AIP and he checked my credit report and bank statements etc so think he must have thought it would have been okay

An AIP can be declined at full application, but usually only if there is something major you haven’t declared beforehand or if there are inconsistencies in your application

[quote Sasha84]@Starseeking thank you! I used a broker to apply for my AIP and he checked my credit report and bank statements etc so think he must have thought it would have been okay[/quote]

In that case your AIP shouldn't be too far off, as presumably your broker took into account any credit agreements (loans, cars, credit cards), and other on-going regular payments and adjusted your income for those before submitting.

Good luck with your purchase!

@Youngatheart00 thanks, nothing major that I’m aware of!

@Starseeking thank you

Ours was totally inaccurate but only because DH was self employed and this wasn't taken into account.

On the full application we were offered about £20k less than we'd budgeted for on the AIP - and that was using a broker. Something to do with my husbands pension contributions that was picked up on the full app but can't recall what the exact issue was!

It sounds like you'll be fine, but a good news story from me anyway... DH is self employed and in the end they offered us more at full application than at AIP. We wanted to put in less deposit so we had more cash for renovations and when we went through full underwriting they were happy to loan us more than the high level checks they'd done at AIP.

It is an incredibly nervy process though especially as everything is taking so flipping long at the moment. Our offer took about 6 weeks to come through IIRC and I was on the verge of panic for most of those.

@SollaSollew 6 weeks!! glad it all went through eventually !