Whether you hear it called an Agreement in Principle, AIP, or Decision in Principle, it all refers to the same thing—and it plays a key role when buying a home.
When house hunting, you will quickly hear estate agents ask one question before anything else: “Do you have an Agreement in Principle?”
For first-time buyers and home movers, it can feel like another hoop to jump through. In reality, it is one of the simplest steps you can take that makes the rest of the buying journey smoother, faster, and far less stressful.
An Agreement in Principle is a lender’s initial indication of how much they may be willing to lend you, based on the information provided at the start. It is not a full mortgage offer, but it is a powerful way to show you are serious and financially ready.
At Calluna Financial, we encourage clients to sort their Agreement in Principle early, before they fall in love with a property. It gives you clarity on your budget, strengthens your position when you make an offer, and can stop you from wasting time viewing homes that are just outside what a lender will support.
Here are some key questions we get asked most often:
- What is an Agreement in Principle?
- How do you get an Agreement in Principle?
- How long does an Agreement in Principle last?
We will also explain why having an Agreement in Principle can really help you secure a home in Scotland, particularly when properties go to a closing date or sellers are choosing between a few different buyers.
What is an Agreement in Principle?
An Agreement in Principle is a non-binding written confirmation from a lender of how much they may be willing to lend you for a property purchase, based on the initially provided figures.
It is based on an early assessment of things like:
- Your income
- Your regular outgoings and credit commitments
- Your deposit amount
- The type of mortgage you might need
The easiest way to think about it is this: it is the lender saying, “Based on what you have told us so far, this is roughly how much you could borrow.”
An Agreement in Principle gives you clarity at the very start of your home search. It helps you understand your realistic budget, focus on suitable properties, and move forward with confidence when the right opportunity comes along.
Why do Scottish buyers need an Agreement in Principle?
Scotland has its own buying process, and in many areas, it moves quickly. If you are buying in popular locations, homes are likely to:
- Receive multiple offers
- Sell in days, not weeks
- Go to a closing date
Even in a steadier market, sellers and estate agents still want reassurance that you can proceed. An Agreement in Principle helps with three things immediately:
1. It proves you are a serious buyer
When you submit a Note of Interest or an offer through your solicitor, sellers want confidence you can actually proceed. An AIP is one of the easiest ways to show that.
2. It gives you a realistic budget
In Scotland, it is common to see “Offers Over” pricing, and the Home Report valuation plays a big role in how lenders view the property. Your AIP helps anchor your search around what is affordable for you.
3. It can strengthen your offer
If a seller is choosing between two similar offers, the buyer who looks most “ready to go” often has the advantage—an Agreement in Principle supports that.
How to get an Agreement in Principle
There are two main routes:
- You apply directly with a bank or lender.
- You speak to a mortgage broker who arranges it with a suitable lender.
Both routes can work, but they are not equal.
If you go directly to your bank, you are only seeing your bank’s criteria. Every lender assesses affordability differently. Small differences in how they treat income, bonuses, overtime, or existing commitments can significantly change your borrowing figure.
This is one of the biggest reasons buyers are sometimes surprised by how much they can borrow when they speak to a broker.
Here at Calluna Financial, we take the time to understand your situation properly, then approach lenders whose criteria fit you. The goal is not just to get any AIP, but to get one that is realistic and supports your plans.
What you will usually need to provide
For an Agreement in Principle, lenders typically ask for:
- Your name, date of birth, and address history
- Employment status (employed, self-employed, contract, etc.)
- Income details (basic salary, overtime, bonuses, commission, or drawings)
- Estimated monthly outgoings (loans, credit cards, childcare, car finance, etc.)
- Your deposit amount and where it is coming from
- The type of mortgage you are looking for (first-time buyer, moving home, remortgage, buy to let)
Does an Agreement in Principle affect your credit score?
This is one of the most common concerns.
Some lenders run a soft credit check for an AIP, which does not leave a visible footprint to other lenders. Others may use a hard credit check.
This is one reason it can be helpful to speak to a broker first. We can guide you through what to expect, choose appropriate lenders, and help you avoid unnecessary repeated applications.
The key point is that an Agreement in Principle is meant to help you, not harm you. When it’s done properly and at the right time, it is a smart step.
How an Agreement in Principle strengthens your offer
In a purchase, particularly in today’s market, the seller isn’t always looking purely at price. They are also looking at certainty.
A strong offer is usually a combination of:
- Price
- Ability to proceed
- Timescales
- Conditions (for example, if you need to sell your property first)
An Agreement in Principle supports the “ability to proceed” part. Here is why that matters in practice:
Sellers want confidence
If a seller has already found their next home, or if they are relocating, they often prioritise a buyer who will not fall through. An AIP reduces uncertainty.
Estate agents filter early
Some agents will not even book viewings for certain properties unless you have an AIP in place. Even where they do, they will typically ask before you can formally note interest.
It helps your solicitor move quickly
Once you are ready to offer, your solicitor needs to know you have finance lined up. An AIP helps your solicitor advise properly and submit an offer with confidence.
It keeps you calm at a closing date
If you are competing in a closing date situation, you do not want to be scrambling for finance at the last minute. Having the AIP done early means you can focus on the offer strategy, not panic about affordability.
A realistic example: how an AIP can change the outcome
Let’s use a realistic scenario we see time and time again.
Laura and Craig are buying their first home in Central Scotland. They have been renting for years and have saved a strong deposit. They check an online calculator and decide their budget is around £190,000. They begin viewing properties around the Offers Over £175,000 mark, assuming that is safe.
After a few viewings, they find a detached home in the central belt that they fall in love with. It has a great layout, is close to commuting routes, and sits in a school catchment they want long term.
The Home Report valuation is £205,000, and the property is likely to go to a closing date.
They speak to Calluna Financial before submitting their offer. When we review their finances, we spot a few key details:
- Craig’s income includes regular overtime that their bank would not fully count, but other lenders will.
- Laura has a small credit card balance that can be cleared quickly.
- Their deposit position is stronger than they realised once they factor in gifted funds correctly.
We approach an appropriate lender and secure an Agreement in Principle that supports a higher borrowing figure than they expected. More importantly, it confirms that an offer aligned with the Home Report valuation is realistic for them.
Now, when their solicitor submits the offer, they can show they are financially ready and properly prepared. The seller sees a buyer who is organised and able to move quickly.
That is exactly what an Agreement in Principle is designed to do. It strengthens your position, reduces uncertainty, and helps you act decisively when the right home appears.
How long does an Agreement in Principle last?
Most Agreements in Principle last between 30 and 90 days, depending on the lender. Some last a little longer, but as a rule of thumb, you should assume it is a time-limited snapshot of your finances.
Why does it expire?
Because lenders know two things can change quickly:
- Your circumstances: A new job, reduced overtime, a change in outgoings, or new credit can all alter affordability.
- The mortgage market: Rates and lender criteria can shift. An AIP reflects the market at the time it was produced.
What happens if it expires?
In most cases, renewing is straightforward. You simply update your details and the lender reissues it, assuming nothing major has changed.
If you are actively viewing properties, we often recommend checking the expiry date and refreshing the AIP before you get close to offering.
What can cause delays in Scotland?
Scottish purchases can be straightforward, but delays can happen due to:
- Slow legal conveyancing in a chain
- Title or property issues uncovered during legal checks
- Delays in receiving documents
- Changes to the buyer’s circumstances mid-process
The best way to avoid stress is to be well prepared and stay organised. This is another area where a broker supports you throughout, helping ensure everything stays on track right through to completion.
Practical tips to help your Agreement in Principle stay valid
Once you have an AIP, the goal is to keep things stable until you have a formal offer and complete it. We generally advise:
- Avoid taking out new credit (car finance, loans, new credit cards).
- Keep your employment stable where possible.
- Keep deposit funds clear and traceable.
- If anything changes, tell your broker early so we can advise properly.
Buying a home is a process. The more stable and well-documented your finances are, the smoother it tends to be.
The Calluna approach: get prepared early and stay in control
If you are a first-time buyer or home mover in Scotland, an Agreement in Principle is not just a tick-box. It is a practical tool that helps you:
- Understand your true borrowing position.
- Focus your search on realistic properties.
- Make stronger offers with confidence.
- Move quickly when the right home appears.
At Calluna Financial, we do what your bank cannot do in a single appointment: we look across the market, assess lender criteria properly, and guide you through each step, from Agreement in Principle to mortgage offer and beyond.
If you are ready to start viewing, or if you simply want clarity on what you can afford, speak to us early. It can make the difference between “maybe” and “we are ready to offer”.
