A soft credit search is a much simpler approach to analyzing your financial situation. Soft searches are usually done on price comparison sites to tell you what products may be available to you or if someone wants to verify your identity. Some mortgage lenders do flexible research first, and more lenders move to this type of research. While the financial institution that conducts a flexible search receives less information about you than if it had done a difficult search, the agreement in principle of one of these lenders remains a strong sign that your full application is accepted. The advantage of the soft search is that while you will be able to see that someone has done a soft search on you when you check your credit file, these searches are not visible to other financial institutions such as banks. This means that you can apply for an agreement in principle for a mortgage without harming your credit score, whether it is successful or not. The need for a “DIP policy decision” with a credit check is motivated by the objectives of each mortgage lender. Large quantities of mortgage lenders like Halifax and Santander would simply use the automated process to whip candidates they don`t want to lend to, comfortable knowing they can do their goals with lower prices (interest rates) if they need to. Specialized mortgage lenders like Precise Mortgages use credit check to determine the mortgage product in accordance with the risk to them. B for example, registering mortgage arrears could be a more expensive product than a client who has always paid on time. “An AIP agreement in principle” can mean different things to different mortgage lenders; Some consider this to be a first oral indication, i.e. They present the scenario (usually the most important points) and an underwriter gives a verdict.
For example, you could reveal that you had a loss of $250 on a water bill, it does not follow that the mortgage lender must carry out a credit check to confirm what you have already said, they simply comment on the probability that this is accepted. I am a professional mortgage broker and, with my experience, I should be able to lead you to a mortgage lender suitable for your circumstances, in order to avoid several decisions being executed in the principles of the AIP agreement or complete implementation steps. Mortgage lenders that operate on the basis of a “hard” search can allow you to change the facts in the decision in principle with a certain schedule. For example, you intend to buy a property for $250,000, but by negotiating, you have reduced the price to $248,000, the mortgage lender can allow a repeat without further defect of their status. I emphasize that even if a mortgage lender does a “soft” search in the policy decision, it is replaced by a “hard” search as soon as you apply for a full mortgage. If you wish to make an offer for a property, we always recommend that you have your mortgage agreement before contacting the real estate agent. You want to give yourself the best possible chance to secure the property you want, at the lowest price, so if you can run in such a way as to have your finances in place, you are definitely in a better position. The agreement in principle also sometimes deters the agent from “counter-selling” your own mortgaged services.