Agreement in Principle but Mortgage Declined: What to Do Next?

If you have ever applied for a mortgage, you will know that getting an Agreement in Principle (AIP) from the lender is an important step. It`s an indication that the lender is willing to lend you a certain amount of money, based on a preliminary assessment of your financial situation. However, even if you have an AIP, it doesn`t guarantee that you will get the mortgage. There are several reasons why a mortgage could be declined, even after you have an AIP. This article explores some of the reasons why this might happen and what you can do next.

Incomplete or Incorrect Information

The most common reason for a mortgage to be declined is incomplete or incorrect information. When you apply for an AIP, you will need to provide extensive information about your financial situation, including your income, expenses, debts, and credit history. If any of this information is incorrect, or if you have not provided all the necessary information, it can cause problems further down the line.

If your mortgage is declined due to incomplete or incorrect information, the first thing to do is to make sure that all the information you have provided is accurate and up-to-date. This might involve checking your credit report, income statements, and other financial documents. If there are any errors or omissions, you should correct them as soon as possible.

Affordability Issues

Another reason why a mortgage might be declined after an AIP is affordability issues. Even if the lender initially approved your application, they will still need to do a full assessment of your finances before they can make a final decision. This includes checking your credit score, income, and expenses to make sure that you can afford the mortgage repayments.

If your mortgage is declined due to affordability issues, you may need to review your finances and see if there are any areas where you can cut back. This might involve reducing your expenses, increasing your income, or paying off some of your debts to improve your credit score. You could also consider looking for a cheaper property or a smaller mortgage that is more affordable for you.

Property Valuation Issues

Finally, a mortgage might be declined due to property valuation issues. When you apply for a mortgage, the lender will send a valuer to inspect the property you are planning to buy. If the valuer identifies any issues with the property, such as structural problems or damp, it can affect the value of the property and the amount the lender is willing to lend you.

If your mortgage is declined due to property valuation issues, you might need to consider alternative financing options. For example, you could look at getting a bridging loan or a secured loan to cover some of the costs of buying the property. Alternatively, you could consider looking for a different property that is within your budget and that would be more easily accepted by lenders.


In conclusion, getting an Agreement in Principle for a mortgage is an important step, but it doesn`t guarantee that you will get the mortgage. There are several reasons why a mortgage might be declined, including incomplete or incorrect information, affordability issues, and property valuation issues. If your mortgage is declined, it`s important not to panic. There are often steps you can take to rectify the situation, whether it`s correcting errors in your application, improving your credit score, or adjusting your budget to make the repayments more affordable. With the right approach and the right support, you can still achieve your dream of buying your own home.