Starting the property search without knowing roughly what a lender might offer can make house hunting frustrating very quickly. That was why I decided to look into an Agreement in Principle before arranging too many viewings. Speaking with Smart city mortgage helped me understand that an AIP is useful for setting a realistic price range, but it is still very different from both an online affordability calculator and a formal mortgage offer. A mortgage calculator is really just an estimate based on the figures you enter, such as income, deposit and loan term. An Agreement in Principle goes a step further because a lender may consider affordability and sometimes carry out a credit search. A formal offer comes much later, after the full application, document checks and property valuation. Smart city mortgage made that distinction much clearer because I had originally assumed an AIP was almost the same as approval. Deposit size can also change the picture. A larger deposit reduces the loan-to-value ratio, which may improve the range of products available and influence how much a lender is prepared to offer https://smartcitymortgages.co.uk/mortgage-agreement-in-principle . That said, lenders still have their own affordability rules, so two applicants with the same deposit percentage may not necessarily receive identical borrowing limits. I found it useful to prepare paperwork early rather than wait until an offer on a property had been accepted. Payslips, bank statements, proof of deposit, identification and details of existing debts are obvious examples. Self-employed applicants may need accounts, HMRC tax calculations or other evidence showing sustainable income. Smart city mortgage can help clarify which documents are likely to be needed so there is less scrambling around when the application moves from the AIP stage to full underwriting. Joint applications can be more complicated as well. The lender does not simply add two salaries together and stop there. Individual loans, credit card balances, childcare costs, dependants and other regular commitments can all affect the combined affordability calculation. That is one reason borrowing estimates can vary so much between lenders even when the applicants provide exactly the same income and deposit figures. Another thing worth remembering is that the property still has to pass the lender’s valuation. A strong AIP does not guarantee that the lender will be happy with the purchase price. If the valuation comes in lower than expected, the loan-to-value calculation changes and the buyer may need a larger deposit, renegotiate the price or consider another product. Smart city mortgage can help explain the options, but the valuation itself is outside the control of the broker or buyer. There is also a difference between going directly to one bank and discussing the situation with a broker. A direct lender can only assess you against its own criteria, while Smart city mortgage may be able to compare how several lenders approach the same financial profile. The trade-off is that buyers still need to ask about broker fees, lender access and how wide the comparison actually is.