Are you struggling to navigate the complex world of getting a mortgage? Airborne Mortgages, based in Leicester, is here to help. We cover multiple areas of the UK, so if you are looking for a trusted Nottingham mortgage broker, a mortgage broker in Leicester or a Birmingham Mortgage broker, we can guide you through the process and help you get approved for your dream home faster.
When it comes to buying a property, there are many different stages involved. One of the most important steps is getting a mortgage. This is where an Agreement in Principle (AIP) and a Mortgage in Principle (MIP) come into play. But what exactly is the difference between these two? In this blog post, we’ll explore the differences between AIPs and MIPs, how they work and why they’re important when it comes to buying a property.
What is an Agreement in Principle?
An Agreement in Principle (AIP) is essentially a document that states that you have been approved for a mortgage with a certain lender. It shows that you meet the lender’s criteria and can afford the mortgage payments. An AIP does not guarantee that you will be accepted for the mortgage, but it does give you an indication of whether or not you are likely to be accepted.
What is a Mortgage in Principle?
A Mortgage in Principle (MIP) is similar to an AIP but it goes one step further. It means that your application has been approved by the lender and they are willing to lend you money for your property purchase. Unlike an AIP, which only shows that you meet their criteria, an MIP guarantees that your application has been accepted and your mortgage will be granted once all other conditions have been met.
How Do They Work?
An AIP works by giving lenders an indication of whether or not you are likely to be accepted for their mortgage product. The lender will assess your financial situation and credit history before deciding whether or not they are willing to offer you an AIP. This process usually takes around 24 hours but can take longer depending on how complex your financial situation is. Once you have been approved for an AIP, it will remain valid for up to three months before needing to be renewed.
A MIP works similarly but goes one step further than an AIP by guaranteeing that your application has been accepted by the lender and they are willing to lend you money for your property purchase once all other conditions have been met. The process of getting approved for a MIP usually takes longer than getting approved for an AIP as lenders need more information from applicants before making their decision. Once approved, MIPs remain valid until either the applicant withdraws their application or until their offer expires (usually after three months).
Why Are They Important?
Both AIPs and MIPs are important when it comes to buying a property as they provide lenders with assurance that applicants meet their criteria and can afford the mortgage payments associated with their chosen property purchase. Having either of these documents also gives buyers more bargaining power when negotiating with sellers as they can show them proof of their ability to get finance quickly if needed – something which could help them secure their dream home at a lower price!
Key Differences Between AIPs & MIPs
There are some key differences between Agreements in Principles (AIPs) and Mortgages in Principles (MIPs). An AIP provides lenders with assurance that applicants meet their criteria while a MIP guarantees acceptance of applicants’ applications subject to all other conditions being met. Both documents provide buyers with more bargaining power when negotiating with sellers as they can show them proof of their ability to get finance quickly if needed – something which could help them secure their dream home at a lower price!
At Airborne Mortgages, we understand the importance of having an AIP or MIP, and our team of experts can help you get one quickly and efficiently. Contact us today to start your journey to owning your dream home.