A mortgage agreement in principle (AIP) is a document that outlines the amount of money a lender is willing to offer a borrower for a mortgage. An AIP is not a guarantee of a mortgage offer, but it does provide an indication of how much a person could borrow if they were to apply for a mortgage. RBS, or the Royal Bank of Scotland, is one UK-based lender that offers AIPs to potential borrowers.
When applying for a mortgage, it is important to have an AIP in place before submitting a full application. This is because an AIP can help to streamline the application process, as the lender has already assessed the borrower’s eligibility and ability to repay the mortgage. Additionally, having an AIP in place can also help borrowers to identify properties that are within their budget, which can save time and effort when searching for a home.
To obtain an AIP from RBS, borrowers must first complete an application form, which can be done online or in branch. The application form will ask for personal details, such as name, address, and employment status, as well as financial information, including income and outgoings. Once the application has been submitted, RBS will conduct a credit check and assess the borrower’s eligibility for a mortgage.
If the borrower meets the lender’s criteria, RBS will provide an AIP. The AIP will typically state the amount of money that the borrower can borrow, the interest rate that will be charged, and any fees or charges that may be associated with the mortgage. It is important to note, however, that the AIP is not a formal mortgage offer and is subject to change depending on a full assessment of the borrower’s financial situation.
Once a borrower has an AIP in place, they can begin house hunting with confidence, knowing that they have an idea of how much they can afford to spend on a property. If a borrower finds a property that they wish to purchase, they can then submit a full mortgage application to RBS. The lender will then conduct a full assessment of the borrower’s financial situation and make a formal mortgage offer if all criteria are met.
In summary, obtaining a mortgage agreement in principle from RBS can be a helpful step in the process of buying a property in the UK. An AIP can give borrowers an idea of how much they can borrow and enable them to start their property search with confidence. To obtain an AIP from RBS, borrowers must complete an application form and undergo a credit check and eligibility assessment. While an AIP is not a guarantee of a mortgage offer, it is a useful tool for those looking to buy a property.