Jump to content
House Price Crash Forum
officebum

Agreement In Principal

Recommended Posts

Interested in a house and just had my first offer refused deciding on whether to up that offer or not. I in mentime the EA tells me that helps to have a agreement in principal (AIP) for a mortgage as seller can tell that you are serious and ready to go, plus if they have 2 bidders they will go with the one who has a AIP.

I had a AIP last year when was really interested in a property that we walked away from in the end and as we been looking for so long now didn't bother with another one as not certain to buy within the 3 months it lasts and to keep repeating it just damages your credit score. Also say i get an AIP to cover purchasing up to150k am i not then revealing my hand to the EA who can then go back to the seller and say hold out for 150k as they can get a mortgage to that amount?

Anyway contacted the bank and they said as long as my situation hasnt changed will take 30mins on phone to get this again when i need it. So i am inclined to not bother with an AIP until i have an offer agreed. Is this a better strategy than getting a AIP potentially revealling my hand and probably not buying in 3 months anyway???

Share this post


Link to post
Share on other sites

We bought earlier this year and didn't bother with one for all the reasons that you list. Our mortgage broker also advised against.

We made our offer in writing, suggesting entry dates, giving the details of our solicitor and stating that we had a mortgage broker in place and would get things rolling as soon the offer was accepted. We also gave an vague outline of our financial position and had our survey done within a week which helped the sellers to see that we were serious.

Your don't need an AIP, particularly if you may take months or years to find the right house.

Edited by InlikeFlynn

Share this post


Link to post
Share on other sites

thanks for the advice i think i will offer next bid in writing with outline of our position and that its our final take it or leave it.

Also agree with countofnowhere and tankus, our generation has been screwed over to pay for the artifical wealth gain of the boomers, and then u have to listen to the f**ers complaining about all us younger people for not saving enuf and been too into gadgets to fuel their property bubble.

I would much rather rent until retirement and then p**s off somehwere else to live maybe buy or not, who cares in the end of the day nobody owns anything as we are time limited. However, sick of s**t rental poperties, limited what you can do can't even have a dog, on unsecure terms my rental flat on market at moment, and i can pay a lot less for a mortgage that i intend to pay off in 10 yrs. Dont ever want to look at property again once i buy and only interested in becoming mortgage free asap dont give a sh*T what it will be worth in 5 - 10 yrs time

Share this post


Link to post
Share on other sites

Anyway contacted the bank and they said as long as my situation hasnt changed will take 30mins on phone to get this again when i need it. So i am inclined to not bother with an AIP until i have an offer agreed. Is this a better strategy than getting a AIP potentially revealling my hand and probably not buying in 3 months anyway???

This is correct. I had one 2 years ago and if anyone was to ask I just say yes I can get a mortgage easy. If you are in a steady job with a good income it takes next to no time to set up a mortgage, so I have never seen the point of a AIP. Not that I currently have any interest in buying a house!

Share this post


Link to post
Share on other sites

This is correct. I had one 2 years ago and if anyone was to ask I just say yes I can get a mortgage easy. If you are in a steady job with a good income it takes next to no time to set up a mortgage, so I have never seen the point of a AIP. Not that I currently have any interest in buying a house!

thanks thought as much and prob a tactic from EA to try find out what i am prepared to pay as a maximum. in fact on 2nd viewing she asked direct well whats most u wana pay and i thought how stupid is that as if i would tell her!

if there was a better alternative more secure rental not funding a baby boomers BTL i would rent anyday. i think that all BTL should be forced out the market and replaced with not for profit rental companies. That might anger all u free mkt types but lets face it we are nowhere near a free mkt as it stands and at least that wld be govt intervention on the side of young people protecting them from being ripped off by their elders

Share this post


Link to post
Share on other sites

I had a AIP last year when was really interested in a property that we walked away from in the end and as we been looking for so long now didn't bother with another one as not certain to buy within the 3 months it lasts and to keep repeating it just damages your credit score.

Really?

Share this post


Link to post
Share on other sites

Really?

apparently yes, credit checking is bizare and outdated. I remember once having to pay a £100 bond on a land line contract because i wasnt on the bloody electoral register

Share this post


Link to post
Share on other sites

apparently yes, credit checking is bizare and outdated. I remember once having to pay a £100 bond on a land line contract because i wasnt on the bloody electoral register

I was also looking to get a property but lost my job, I went back to the origional lender who had agreed an AIP before, told circumstances said should be no problem now im in another job, (finnished one on the friday started another on the monday).

I said that since it had been 6 months i was concerned about my credit rating, their advice was that getting multiple credit checks for loans done in a short period sets of alarm bells but not over longer periods.

I guess if you have good/NO credit rating you could apply for say 10 or 20 loands of the course of a day. and leave the country.

although im not sure i belive there is a government site you can visit to view your credit rating. http://www.moneysavingexpert.com/loans/credit-rating-credit-score

Share this post


Link to post
Share on other sites

There's no such thing as your "credit rating". That is item number one in a huge font on the page you linked to!

Thanks for the link thats really interesting. Still there is also the problem that an AIP reveals your hand to the estate agent dont want them knowing what i am either capable of paying or what i would offer max on a house. There would also be no point in getting a AIP for a bid that might be rejected far better IMO to wait till offer agreed then get one. Personally i think its the agent trying it on asking for it before a bid agreed, house been on market 3 months ok they took 10k off asking price but still hasnt shifted so dont think their is a stampeed to buy it. Although not sure if its just because of run up to xmas but is hardly any property on market and what is around tends to be awful. So anything decent does tend to be snapped up quickly when usually nothing much sells around here in winter.

Share this post


Link to post
Share on other sites

You can photocopy the AIP (if you choose to get one), and black out the amounts if the EA insists on seeing it. Then tell the EA you're good for the money and will offer what you consider the house to be worth, and the offer is covered by the AIP. You're right not to want to let them know the max you can go to.

Share this post


Link to post
Share on other sites

You can photocopy the AIP (if you choose to get one), and black out the amounts if the EA insists on seeing it. Then tell the EA you're good for the money and will offer what you consider the house to be worth, and the offer is covered by the AIP. You're right not to want to let them know the max you can go to.

yes true but i think i will stick to my guns and insist on an agreed offer before bother with mortgage. TBH can see us going to rent again as our flat is turning into the flat on the slum lord thread and is no use asking landlady to spend any money she is so tight.

Share this post


Link to post
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now

  • Recently Browsing   0 members

    No registered users viewing this page.

  • The Prime Minister stated that there were three Brexit options available to the UK:   215 members have voted

    1. 1. Which of the Prime Minister's options would you choose?


      • Leave with the negotiated deal
      • Remain
      • Leave with no deal

    Please sign in or register to vote in this poll. View topic


×

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.