In principle, a mortgage is not a formal mortgage offer, nor is it guaranteed that the lender will grant you a mortgage in the future. An AIP is not the same as a formal mortgage offer, so you should always apply for a mortgage once you have accepted an offer for a property. In principle, a mortgage loan agreement is followed by a complete application for a mortgage loan and the information contained in the initial decision is accompanied by cross-references. It is therefore important that the facts made available to the mortgage lender are correct the first time, as false information is reprehensible by its sub-authors and can lead to rejecting your case or changing the conditions they wish to offer. It`s important to remember that in principle, an agreement is not a mortgage offer or an official confirmation that you have a mortgage. To get this, you need to go through the entire application process. A decision of principle shows that one can theoretically afford to buy a property. This could make you a more attractive buyer and pull you away from other potential buyers. Once you have your agreement in principle, you can look at real estate that falls within your specific price range; That is, the amount you could borrow, plus every deposit you might have saved. The important thing is that not all mortgage principles are the same. So be warned and they can give you a misguided sense of security.
Make sure you understand the scope of validation using the lender`s underwriting policy and that it has included a credit check. The purpose of an agreement in principle is to give the lender an initial and timely guarantee of its willingness to lend. It is about communicating solid facts about the applicant`s personal circumstances. Be sure to get advice on products and lenders before proceeding with an agreement in principle, as an agreement can leave a soft or hard imprint on your credit report. Real estate agents will often want to make sure you`ll be able to get a mortgage on a property before making an offer, so it can be helpful to have an agreement by that date. Even if you have obtained an AIP, you may not receive a formal mortgage offer. This can be for a number of reasons, for example. B if you have recently been declared bankrupt, if your financial history is incomplete, or if you have only been busy for a few months.. . .