The need for a “DIP policy decision” with credit quality check is determined by the objectives of each mortgage lender. Large mortgage lenders like Halifax and Santander would simply use the automated process to compensate applicants they don`t want to lend to, knowing that they can offset their goals with lower prices (interest rates) if necessary. Specialized lenders like Precise Mortgages use credit control to determine the mortgage product based on the risk to them, for example.B. a mortgage arrears record can be a more expensive product than a customer who has always paid on time. However, over the years, this process has turned into a “decision of principle” that almost certainly involves a credit check and often the validation of your creditworthiness. This process usually involves an automated it decision at the front- and can lead a sub-author to check if it is limiting. A soft credit search is a much simpler approach to analyzing your financial situation. Gentle searches are usually done on price comparison sites in order to tell you which products might be available to you or if someone wants to verify your identity. Some lenders mostly do gentle searches, with more lenders switching to this type of research.
While the financial institution that performs a soft 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 complete application is accepted. The advantage of soft searches is that, although you can see that someone has performed a soft search at your home 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 affecting your creditworthiness, whether it is successful or failing. “AIP agreement-in-principle” may mean different things for different mortgage lenders; Some see it as a first oral indication, that is: You present the scenario (typically the highlights) and a sub-author makes a judgment. For example, you might reveal that you had a loss of £250 on a water bill, it does not follow that the lender has to carry out a credit check to confirm what you have already said, they are only commenting on the likelihood that this will be accepted. If you wish to make an offer for a property, we always recommend that you have your mortgage loan agreement in principle before contacting the real estate agent. You want to give yourself the best possible chance of securing the desired property at the lowest price, so if you can present yourself as with your finances, then you are definitely putting yourself in a better position. The agreement in principle sometimes prevents the agent from trying to “sell” his own internal mortgage services to you. There is a growing trend of mortgage lenders who, in principle, practice a “soft” research agreement. By this I mean that the mortgage lender will see the result and will be able to share it with other brands within its wider group, and that it will also be recorded in your credit information; However, it is not displayed in your public record, so it does not affect your creditworthiness.
By the way, if you are considering obtaining credit information, I would urge you to consider a “multi-agency”, as this will cover the main sources to which a lender will relate. Test for free for 30 days, then £14.99 per month – cancel at any time. I emphasize that even if a lender does a “soft” search in the decision, it is replaced by a “hard” search as soon as you submit a complete mortgage application. *Barclays Consumer Website offers a “Soft Search”, but is in principle a watered-down agreement in which only a few credit data is verified, it is NOT a complete decision in principle and could be misleading….