fbpx

Mortgage Advice Experts

Menu
  • Home
  • Videos
  • Mortgage Calculators
  • Residential
    • Mortgage Deals
    • First Time Buyer
    • Remortgage
    • Right to Buy Mortgage
    • Bad Credit Mortgage
    • Self Employed
    • High Income Multiple
    • Help To Buy Mortgage
    • Gifted Deposit
    • Foreign Nationals
    • Debt Consolidation
    • Equity Release
    • Close
  • Buy to Let
    • Buy to Let Mortgage Deals
    • Buy to Let Tips
    • BTL 80% Loan to value
    • Buy to let Remortgage
    • Let to Buy
    • HMOs
    • Buy to Let with Bad Credit
    • Limited Company
    • Portfolios
    • Holiday Lets
    • Ex Pats
    • Rent to Family Memeber
    • DSS Tenants
    • Into Retirement
    • Foreign Nationals
    • Inherited Property
    • Close
  • Bridging Loans
    • Commercial Mortgage Tips
    • Bridging Loans Explained
    • Why use Bridging Finance
    • Bridging Finance Rates
    • Auction Finance
    • Auction Finance Rates
    • Non Standard Commercials
    • Development Finance
    • Close
  • Protection
    • Will Writing Service
    • Probate Services
    • Close
  • Testimonials
  • About Us
    • Why Niche Advice
    • Our Fees
    • Testimonials
    • Blog
    • Join our Team
    • Privacy Notice
    • Terms and Conditions
    • Close
  • Contact Us
You are here: Home / Mortgages / Who runs a soft and hard credit checks at AIP

by Payam Azadi

Who runs a soft and hard credit checks at AIP

Agreement In Principle AIP

What you need to know about an Agreement In Principle AIP also known as a Decision In Principle DIP

The earliest stage in a mortgage is an agreement in principle (AIP) and it can involve a credit check depending on the Mortgage Lender. Please note these are lenders that we have access to via the Broker credit profile systems will be different if you’re looking to go to the lenders direct.

“An agreement in principle AIP” itself can mean different things to different Mortgage Lenders; some see this an initial oral indication to lend i.e. you put forward the scenario (typically the salient points) and an underwriter provides a verdict. For instance you might disclose you have had a £250 default on a water bill, it does not follow that the Mortgage Lender needs to run a credit check to confirm what you’ve already told, they merely comment on the likelihood of this being accepted.

However, down the years this process has morphed into “decision in principle” which almost certainly will include a credit check and often validation of your credit score. This process normally involves an automated computer decision at the front end and may result in an underwriter reviewing if it is borderline.

The need for a “decision in principle DIP” with a credit check will be driven by the individual Mortgage Lenders’ objectives. The large volume Mortgage Lenders such as Halifax and Santander would simply use the an automated process to whittle out the applicants they don’t wish to lend to, comfortable in the knowledge they can make up their targets with a drop in price (interest rate) if they need to. Specialist Mortgage Lenders such as Precise Mortgages will use the credit check to determine the mortgage product in accordance to the risk to them e.g. a record of mortgage arrears might be higher priced product than a customer that has always paid on time.

Will the credit check affect my credit rating?

There is an increasing trend of Mortgage Lenders that operate a “soft” search agreement in principle. By that I mean the respective Mortgage Lender will see the result and may share this with other brands within its broader Group, and it will also be recorded on your credit report; however it will not show on your public record so will not have a detrimental effect to your credit rating. By the way, if you are thinking of getting a credit report, I would urge you to consider a “multi-agency” one as this covers the main sources a Mortgage Lender will reference. Try it FREE for 30 days, then £14.99 a month – cancel anytime.

Free Credit Report from Checkmyfile

Try it FREE for 30 days, then £14.99 a month – cancel anytime

The Mortgage Lenders that run on the basis of a “hard” search may allow you to amend the facts in the decision in principle with a certain timeframe. For example, you have intended to buy a property at £250,000 but through negotiation you have got the price down to £248,000, the Mortgage Lender may allow a re-run without any further blemish to your status.

I stress the point that even if a Mortgage Lender operates a “soft” search at decision in principle will be superseded with a “hard” search once you make a full mortgage application. 

Below is a summary of some of the Mortgage Lenders approaches to Agreement In Principle (AIP).

LendersAIP Credit check search type
Accord MortgagesSoft
Aldermore MortgagesSoft
BarclaysHard (see below)*
Bluestone MortgagesSoft
BM SolutionsSoft
CoventryHard
HalifaxSoft
KensingtonSoft
Kent RelianceSoft
Masthaven FinanceSoft
MetroSoft
NationwideSoft
NatWest Intermediary SolutionsSoft
Pepper MoneySoft
PreciseSoft
Principality Building SocietyHard
SantanderSoft
Saffron for IntermediariesSoft
Skipton IntermediariesSoft
The Mortgage LenderSoft
The Mortgage WorksHard
TogetherSoft
TSBSoft
Vida Home LoansSoft
Virgin MoneyHard

This information was compiled 27th April 2020 and should be re-checked with the respective lender for the up-to-date position, prior to submission.

*The Barclays Consumer website offers a “soft search” but is a watered down agreement in principle whereby only some credit data is verified, this is NOT a full decision-in-principle and could be misleading. For a reliable full decision, which leaves a “hard” footprint, you will need to speak to a Barclays Advisor or an independent Mortgage Brokers such as Niche Advice.

To find out more about Credit Reports and what I think of the different types just Click Here to watch my video on this subject.

I’m a professional Mortgage Broker and through my experience, I should be able to guide you to an appropriate Mortgage Lender for your circumstances to avoid multiple decision in principles being run at Agreement In Principle AIP or full application stages.

WE DON’T HAVE TO MEET YOU

We can deal with all our clients by Phone, Whatsapp, Skype, Email and Post.

Contact us
Payam Azadi

Author: Payam Azadi

Payam Azadi is a partner at Niche Advice who are whole of the market Independent Mortgage Brokers. His role is very much focused on Property financing both on residential and commercial lines. To get in contact with him please click here.
Twitter Facebook Linkedin

Filed Under: Mortgages

Proud to be sponsors

Mortgage broker awards

Contact Us

Our Fees

Why Niche Advice

Mortgage Deals

Tools / Calculators

Latest News / Blog

Payam Azadi

Declined Buy to let mortgage due to background property portfolio stress test

The background property portfolio stress test is stopping borrowing more There could be a variety of reasons why you've been turned down for a … [Read More...]

Payam Azadi

Up to 10 times Income Multiple Remortgage

I never thought I'd be writing about 10 times income multiple for a mortgage.Looking back income multiples have come a long way to get to 10 times. … [Read More...]

Payam Azadi

BRRR 85% LTV bridging loan for property refurbishment

BRRR Finance Refurb Projects to 85% LTV bridging on day 1 May be excitement and refurb finance don’t naturally gel together but this 85% Loan to … [Read More...]

AS A MORTGAGE IS SECURED AGAINST YOUR HOME OR PROPERTY, IT COULD BE REPOSSESSED IF YOU DO NOT KEEP UP THE MORTGAGE REPAYMENTS.

If you are thinking of consolidating existing borrowing you should be aware that you may be extending the terms of the debt and increasing the total amount you repay.

Niche Advice Limited is a Credit Broker and does not lend money directly to clients. Niche Advice Limited is authorised and regulated by the Financial Conduct Authority. FCA Number: 750263.

Commercial Buy-to-Let and commercial mortgages are not regulated by the Financial Conduct Authority.

Our Fees

Click here for our fees structure. A full detailed fee plan will accompany all our quotes.

Niche Advice Limited has a commercial arrangement under an affiliate programme with Check My File and is remunerated for referrals.

Terms and Conditions

If you wish to register a complaint, please write to us on the details below or call us on: 020 7993 2044.

Correspondence Address: Niche, Unit F6, The Addington Business Centre, Vulcan Way, New Addington, Surrey CR0 9UG.

A summary of our internal complaints handling procedures for the reasonable and prompt handling of complaints is available on request and if you cannot settle your complaint with us, you may be entitled to refer it to the Financial Ombudsman Service at www.financial-ombudsman.org.uk or by contacting them on 0800 0234567.

Site Terms and Conditions
Customer Privacy Notice

niche youtube

CONTACT NICHE ADVICE
Tel: 020 7993 2044

Registered Office: Niche, Unit F3, The Addington Business Centre, Vulcan Way, New Addington, Surrey CR0 9UG. Registered in England & Wales. Company registration number: 06599033.

Members of The Financial Intermediary & Broker Association - Number SBS36389

logo

© 2022 · Niche Advice Limited · Site Designed by Niche Advice Design Team

Manage Cookie Consent
To provide the best experiences, we use technologies like cookies to store and/or access device information. Consenting to these technologies will allow us to process data such as browsing behaviour or unique IDs on this site. Not consenting or withdrawing consent, may adversely affect certain features and functions.
Functional Always active
The technical storage or access is strictly necessary for the legitimate purpose of enabling the use of a specific service explicitly requested by the subscriber or user, or for the sole purpose of carrying out the transmission of a communication over an electronic communications network.
Preferences
The technical storage or access is necessary for the legitimate purpose of storing preferences that are not requested by the subscriber or user.
Statistics
The technical storage or access that is used exclusively for statistical purposes. The technical storage or access that is used exclusively for anonymous statistical purposes. Without a subpoena, voluntary compliance on the part of your Internet Service Provider, or additional records from a third party, information stored or retrieved for this purpose alone cannot usually be used to identify you.
Marketing
The technical storage or access is required to create user profiles to send advertising, or to track the user on a website or across several websites for similar marketing purposes.
Manage options Manage services Manage vendors Read more about these purposes
View preferences
{title} {title} {title}