Santander Agreement in Principle Soft Search: What You Need to Know
If you`re in the market for a new mortgage, you may have heard of the Santander Agreement in Principle (AIP). A Santander AIP is essentially a pre-approval for a mortgage, giving you an idea of how much you can borrow and what your monthly payments might be. But what makes Santander`s AIP different from other lenders` pre-approvals is that they use a “soft search” to check your credit score.
What is a soft search?
When you apply for credit, such as a loan or credit card, the lender will usually perform a “hard search” on your credit file to determine how much of a risk you are to lend to. A hard search leaves a footprint on your credit file, which can have a negative impact on your credit score.
A soft search, on the other hand, is a less invasive type of credit check that does not leave a visible mark on your credit file. Soft searches are typically used for pre-approvals, insurance quotes, and job applications.
How does the Santander AIP work?
To get a Santander AIP, you simply need to fill out an online application form with some basic personal and financial information. Santander will then perform a soft search on your credit file to determine if you`re eligible for a mortgage.
The soft search will not affect your credit score, and you will receive an instant decision on whether or not you qualify for a mortgage with Santander. If you are approved, you`ll receive an AIP certificate, which you can use when you make an offer on a property.
Once you`ve found a property you want to buy, you`ll need to go through the full mortgage application process with Santander. At this stage, they may perform a hard search on your credit file, which could affect your credit score.
What are the benefits of a Santander AIP?
Using a soft search for the AIP has several benefits:
– It won`t impact your credit score, so you can apply for an AIP without worrying about damaging your credit file.
– You can get an instant decision on your eligibility for a Santander mortgage, which can help you speed up the homebuying process.
– Knowing how much you can borrow can help you narrow down your property search and make more informed offers.
Are there any downsides to a Santander AIP?
While a Santander AIP can be a useful tool when buying a home, there are a few things to keep in mind:
– The AIP is not a guarantee that you`ll be approved for a mortgage. Santander will still need to perform a full credit check and underwriting process before they make a final decision.
– If you apply for a mortgage with a different lender, they will likely perform a hard search on your credit file, which could impact your credit score.
– The AIP certificate is only valid for 30 days, so if you don`t find a property you want to buy within that time frame, you`ll need to apply for a new AIP.
In summary
The Santander Agreement in Principle (AIP) with a soft search can be an excellent tool for homebuyers. It can give you an idea of how much you can borrow and what your monthly payments might be without impacting your credit score. Knowing your borrowing power can help you narrow down your property search and make more informed offers. However, keep in mind that the AIP is not a guarantee that you`ll be approved for a mortgage and that it`s only valid for 30 days.