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If you’re about to embark on your home ownership journey, one of the first stages is to understand your budget and how much you can afford, for your own benefit and as evidence to sellers and estate agents. The best way to do this is by securing an agreement in principle. In this guide, we explain the process and considerations of securing a Santander mortgage in principle.
Benefits of securing a Santander agreement in principle
Securing a Santander Agreement in Principle (AIP) will help put you in a stronger buying position when making an offer. Sellers want to know that you are a serious buyer, and having a certificate to evidence your pre-qualification for a mortgage can go a long way.
The streamlined process saves time by reducing the paperwork needed later and makes the overall process more efficient. It also gives you peace of mind and more confidence in your offer. Additionally, the soft credit check involved has no impact on your credit report.
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When should you secure an AIP?
You should secure an Agreement in Principle (AIP) as soon as possible after checking your credit score and ideally before you start viewing properties. This helps avoid wasting your time and others’.
If you find a property you like, it can be more challenging to get your offer accepted if you haven’t looked at mortgage options first. This can lead to disappointment, or the property may be sold to someone who has their finances in order.
What Does the Santander Mortgage Agreement in Principle Process Involve?
The process involves several steps:
Check Criteria: Ensure you meet Santander’s eligibility criteria for a mortgage.
Determine Maximum Borrowing Amount: Assess the maximum amount you can borrow based on your financial information.
Affordability Assessment : Conduct an affordability assessment to evaluate your income, expenses, and financial commitments.
Soft Credit Check: Perform a soft credit check, which does not affect your credit score.
Outcome: The application will result in an acceptance, decline, or referral for further review
Certificate Issued: If accepted, you will receive a certificate indicating your Agreement in Principle.
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How long does a Santander decision in principle take?
The process of securing a Santander AIP is fairly quick and can take 20-30 minutes. However, collating the necessary documents and checking the lender’s criteria may take a little more time. Once you’ve provided your documents to the broker or lender, it shouldn’t take more than a day or two for them to process, and the decision is usually instant.
How long does a Santander MIP last?
A Santander AIP is usually valid for 90 days. It’s important to note that while the AIP is valid for that time, you will still be re-assessed, including a credit check, when you fully apply for the mortgage.
Your income and affordability will be evaluated based on the information at the time of the full application, not the original AIP.
Reasons you may be refused a mortgage application after securing an AIP
If you’ve secured an AIP, it’s a good indicator of your chances of success, but it’s by no means a guarantee. There are several reasons you may be refused after securing an AIP:
– Incorrect information given or failure to disclose credit commitments or adverse credit history.
– Criteria not checked thoroughly, which can be reduced if done through a broker rather than by yourself.
– The property may not be acceptable to the lender.
These factors can impact the final decision, highlighting the importance of accuracy and thoroughness in your application.
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What to do if declined on a Santander aip?
Find Out Why: Contact Santander to understand the specific reasons for the decline.
Check Your Credit Report: Review your credit report for any issues or errors that may have affected your application.
Consider Financial Adjustments: Look at increasing your deposit, reducing the amount you wish to borrow, or clearing some debts to improve your financial profile.
Consult a Broker: A mortgage broker can provide professional advice, help you understand the lender’s criteria, and guide you to alternative lenders who may be more suitable for your situation.
Reapply: Once you have addressed the issues and made necessary adjustments, you can reapply either with Santander or explore options with other lenders.
How to improve your chances of success
With your application.
Check and Improve Your Credit Score: Ensure your credit report is accurate and address any issues or errors. Pay off outstanding debts and avoid taking on new credit before applying.
Provide Accurate Information: Double-check that all the information you provide is accurate and complete, including income, expenses, and existing credit commitments.
Reduce Existing Debts: Pay down existing debts to improve your debt-to-income ratio, which can positively impact your affordability assessment.
Save for a Larger Deposit: A larger deposit can improve your chances by reducing the loan-to-value (LTV) ratio, making you a more attractive borrower.
Ensure Stable Employment: Maintain stable employment, as lenders prefer borrowers with steady income and job security.
Consult a Mortgage Broker: A broker can help you understand Santander’s criteria, ensure you meet them, and guide you through the application process to reduce the risk of errors.
Organise Your Documents: Have all necessary documents ready and up to date, including proof of income, ID, and address, to streamline the application process.
Avoid Major Financial Changes: Avoid making major financial changes, such as changing jobs or making large purchases, before applying, as these can affect your financial stability.
Role of a mortgage broker – How can Strive Help
A broker plays a crucial role when securing an AIP. They help you find the best mortgage options suited to your needs by matching you with lenders most likely to approve your AIP.
Brokers assist with the application process, ensuring all forms are correctly filled out and necessary documents are provided. With access to a wide range of lenders, including exclusive deals, they simplify the mortgage application process and provide expert advice.
Brokers can negotiate better rates and terms on your behalf, track your application progress, and handle any issues that arise. Additionally, they provide post-AIP support, assisting with the full mortgage application and ensuring a smooth completion.
FAQ’S
Does an AIP Mean I’ll Get a Mortgage?
An Agreement in Principle (AIP) is a good indicator of your chances of getting a mortgage, but it is not a guarantee. The final mortgage approval depends on a full assessment of your financial situation, a hard credit check, and the property valuation.
Do I Need an AIP to Port My Mortgage?
While you do not necessarily need an AIP to port your mortgage, having one can be beneficial. It helps demonstrate your financial stability and can streamline the process of transferring your existing mortgage to a new property.
Are Santander a Good Mortgage Lender?
Santander is considered a reputable mortgage lender with competitive rates and a variety of mortgage products to suit different needs. They offer good customer service and have a straightforward application process, making them a solid choice for many borrowers. However, the best lender for you will depend on your specific financial situation and requirements.
Can I appeal against a mortgage decline from Santander?
Yes, although the chances of a successful appeal are low. You may be able to borrow less or put down a larger deposit to improve your chances. The possibility of a successful appeal depends on the reason for the refusal.
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For more information on mortgages for contractors, please contact a member of the Strive team, by emailing [email protected] or call us on 01273 002697.
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