When it comes to applying for a mortgage, one of the first steps you`ll typically take is obtaining an agreement in principle (AIP). This is essentially a statement from a lender stating that, based on certain information provided by you, they would be willing to lend you a certain amount of money.
But what if you want to get two agreements in principle? Is this possible, and if so, is it a good idea?
The short answer is yes, you can technically get two agreements in principle. However, it`s not always a wise decision.
Here`s why:
1. Multiple applications can harm your credit score
Each time you apply for an agreement in principle, the lender will run a credit check on you. While one or two applications won`t harm your credit score too much, multiple applications could lower it significantly.
This is because credit agencies tend to view multiple applications as a sign that you`re desperate for credit and may not be able to manage your finances well.
2. Two agreements could harm your chances of getting a mortgage
Getting an agreement in principle is not a guarantee that you`ll be approved for a mortgage. Lenders will still need to conduct a full affordability assessment before they can officially offer you a mortgage.
If you have two agreements in principle from two different lenders, this could actually harm your chances of getting a mortgage. Lenders may view this as a red flag and wonder why you`re applying to multiple lenders.
3. It`s time-consuming and unnecessary
Obtaining an agreement in principle is a time-consuming process that involves filling out forms, providing documentation, and waiting for the lender to review your application.
If you`ve already obtained one agreement in principle, applying for another could mean going through this process all over again. This is unnecessary, especially if your first agreement in principle is from a reputable lender who can offer you a good deal.
In conclusion, while it`s technically possible to obtain two agreements in principle, it`s not always a good idea. Instead, focus on finding a reputable lender who can offer you a good deal and work with you to secure the mortgage you need. This will save you time, money, and unnecessary stress in the long run.