When buying a home, it is common to have an agreement in principle (AIP) in place. This is a document from a mortgage lender stating that they are willing to lend a certain amount of money based on your income, credit score, and other factors. However, what happens if you need to extend your AIP?
The short answer is yes, you can extend an agreement in principle. However, there are some important factors to consider.
Firstly, you need to check with your lender whether they allow AIP extensions. Some lenders may have strict policies in place, while others may be more flexible. It is important to check this before you apply for an AIP, so you know what your options are if you need to extend it later.
Secondly, you need to consider why you need to extend your AIP. If it is because you have not found a property yet, then this is usually not a problem. Most lenders will allow you to extend your AIP for a few months while you continue your property search.
However, if your circumstances have changed since you applied for your AIP, this could present a problem. For example, if you have lost your job, your lender may need to reassess your income and credit score before they can extend your AIP. Similarly, if interest rates have risen since you applied, your lender may need to adjust their calculations before they can extend your AIP.
Finally, it is worth noting that extending your AIP may come with additional fees. Some lenders may charge an extension fee, while others may require you to go through the entire application process again, which could mean paying for another valuation, credit check, and other fees.
In summary, while it is possible to extend an agreement in principle, it is important to check with your lender, consider the reasons for the extension, and be prepared for any additional fees that may be incurred.