Importance of Getting Pre-Approved (“DIP” or “AIP”)

Getting Pre-Approved (“DIP” or “AIP”)?

Understand the Importance of Getting Pre-Approved (“DIP” or “AIP”).

A mortgage pre-approval, sometimes referred to as a DIP or AIP, is an initial assessment from a lender. They will review:

  • Your income (e.g. salary, self-employment earnings)

  • Your outgoings (loans, credit cards, commitments)

  • Your credit history

Based on this, they provide a guide amount that you may be able to borrow.

Importance of Getting Pre-Approved (“DIP” or “AIP”) while buying a home can feel like a big step, and one of the first things you may hear about is getting “pre-approved” for a mortgage — also known as a Decision in Principle (DIP) or Agreement in Principle (AIP).

Getting a DIP/AIP is not a guarantee you will get a mortgage, but it can be a valuable early step to help you understand how much you may be able to borrow and show sellers you are a serious buyer.

Why Getting a Pre-Approval (DIP/AIP) Matters

  1.  Helps You Set a Clear Budget - Knowing your likely borrowing range allows you to focus your property search on realistic price points — saving time and avoiding disappointment.
  2. Strengthens Your Position With Sellers - Estate agents and sellers often ask if you have a DIP/AIP. Having one shows you are financially prepared and ready to proceed, which may make your offer more attractive.
  3. Speeds Up the Process - Having a pre-approval means that some of the checks have already been carried out. This may help speed up your full mortgage application once you find a property.
  4. Identifies Issues Early - If there are issues with credit history or affordability, they can often be addressed before you commit to a full mortgage application.

Why Sellers and Estate Agents Value a DIP/AIP

In today’s property market, having a Decision in Principle (DIP) or Agreement in Principle (AIP) can make you stand out as a buyer. Here’s why:

  • Shows You’re a Serious Buyer – A DIP/AIP demonstrates that you’ve already spoken to a lender or adviser and taken steps to check your affordability.

  • Gives Sellers Confidence – Sellers are more likely to accept your offer if they know you are likely to secure finance.

  • Helps Estate Agents Progress Sales – Agents want transactions to move smoothly. Having a DIP/AIP can reduce the risk of delays later in the process.

  • May Speed Up the Offer Process – If multiple buyers are interested, having a DIP/AIP can put you in a stronger position compared to someone who hasn’t started their mortgage checks.

Step-by-Step: How Pre-Approval (DIP/AIP) Works

Speak to a Mortgage Adviser
Your adviser will collect key financial information and recommend suitable lenders.

Provide Basic Documents
You’ll typically need:

  • Payslips or self-employed accounts
  • Bank statements
  • Details of loans, credit cards, or commitments
  • Proof of ID (passport or driving licence)

Lender Assessment
The lender runs an affordability check and may carry out a soft or hard credit check.

Receive Your DIP/AIP
If approved, you’ll receive a document confirming the maximum amount you may be able to borrow. Most DIPs/AIPs are valid for 30–90 days.

Use It When Making Offers
Showing your DIP/AIP to estate agents helps demonstrate you are a serious buyer.

Things to Keep in Mind

  • It’s Not Binding – A DIP/AIP does not guarantee a mortgage offer.

  • Circumstances Can Change – If your income, outgoings, or credit record changes, the amount you can borrow may also change.

  • Credit Checks – Always confirm if the lender will run a soft or hard search. Too many hard checks in a short time can affect your credit profile.

  • Industry Trend: Many UK buyers now seek a DIP/AIP before starting their property search because estate agents increasingly request one before booking viewings.

Final Thoughts

A mortgage is one of the biggest financial commitments you’ll ever make, so it’s important to understand how it works before you proceed.

Always speak to a qualified mortgage adviser who can assess your personal situation and help you find the most suitable option.

This article is intended for general information only and does not constitute financial advice. Always seek personalised advice from a qualified mortgage adviser before making any financial decisions.

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