Halifax have introduced a new ground-breaking tool that allows users to reach an “Agreement in Principle” on a house that they have recently viewed. Once potential customers have filled out the form they will be able to receive a decision on their application within 15 minutes of sending it off. The app has an integrated system that carries out both credit score and affordability checks.
The app will not act as a guarantee that you will be accepted for the mortgage but will merely act as an indicator of whether or not you are likely to be approved by the bank. There will still be a number of further checks that you are subject to by Halifax before they decide on whether or not your request for a mortgage will be granted.
The tool will automatically send users to a calculator that will allow them to see how much the mortgage would cost each month with varying deposit sizes and repayment term lengths. The program will also display information on other costs such as stamp duty and legal costs.
The result of users’ applications will be emailed to them straight away with instructions on how to go about confirming the mortgage. Another feature will enable customers to send this decision directly to an estate agent.
It is yet to be seen how much this will actually help customers when it comes to letting them know that an application will actually go through without difficulty.
David Hollingworth, of mortgage broker London and Country, said: ‘The benefit of an AIP generally is that it can help give some idea of just how much they can afford to borrow and that they can pass a credit check if there are any worries about any credit blips in the past.’
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‘It can also help to show any prospective vendor that you look OK to finance a purchase and gives some comfort on that side of things.’
‘Itís important to realise that an AIP doesnít give any guarantees that a full application will sail through and more documentation will be required to further an application.’
‘Itís also important to be sure that the lender is still right for you as it could take a couple of months to find the right property and deals may have moved on.’
‘Donít get AIPs from lots of lenders as searches can start to show on your file and too many could even have a negative impact on your credit score if they leave a hard footprint.’