A mortgage in principle is also referred to as an AIP. It’s no secret that the housing market makes Ireland a highly competitive place to try to buy at the moment. It seems as though everyone and their cousin are currently house hunting in Ireland, and the high number of hopeful buyers makes finding a dream home that much more difficult. As does the fact that residential property prices have jumped by 15% in the past 12 months
So, how can you make things that little bit easier for yourself and increase your chances of finding—and securing—a home you love? Having a mortgage in principle agreement at your disposal can be a big help. Read on to learn more about what this is and how you can get it.
What Is Mortgage Approval ?
Mortgage approval is a common part of the Ireland mortgage process. It can be viewed as a preliminary step in being approved for a mortgage that happens before actually securing approval from a lender.
Essentially, getting approval in principle means that you’ve spoken with a bank or other lending institution and they’ve given you an indication of how much they’d be willing to lend you. This is not the same as being given this amount, however.
The lending institution will give you a letter stating the amount they’d be willing to lend you. You can then use this letter to show to sellers during your house hunt.
Approval in principle is also sometimes known as a mortgage in principle, decision in Principle, or agreement in principle. It’s not legally binding, and will usually be valid to use for a maximum of six months.
Why Do You Need a Mortgage in Principle?
At this stage, you might be wondering what’s the point of getting a mortgage offer thats not a full loan offer . Why not just get full mortgage approval right off the bat? There are a few reasons doing a mortgage in principle application is important.
First, it’s a much quicker and straightforward process to attain a mortgage in principle than it is to get approved for a mortgage. This means that you’ll have more time to look for homes without having to go through the entire process of being approved for a mortgage. Additionally, having approval in principle will make you a lot more competitive candidate to realtors and those selling their homes.
Approval in principle shows a bank is willing to lend you a certain amount of money. This will show the relevant parties exactly what you’re able to bring to the table. This, in turn, puts you ahead of other candidates who haven’t taken this step.
How to Get Approval in Principle
Depending on the lender you’re going with, the process will likely look a little different. Usually, it’s as simple as answering a few questions about your financial health. Heres how to get a mortgage in principle
You can either apply for an AIP via a mortgage broker or directly to your chosen lender. You’ll need to confirm your identity and provide answers regarding your income and assets. Then the lender will run some eligibility checks and finally calculate how much they’re able to lend you. See bonkers for comparables here
Grab the First Rung on the Housing Ladder Today
Obtaining approval in principle is one of the number one things you can do to improve your chances of finding your dream home. If you’d like to attain a mortgage in principle, we’d be more than happy to help.
Some questions we often get is how much does a mortgage in principle cost and how reliable is a mortgage in principle A member of our team of trusted advisers will talk you through the entire process from start to finish. Get in touch today to set up a meeting at a time that’s convenient for you. Contact the experts at Pangea Mortgages now