You will then receive a mortgage based on what the lender thinks you can afford to pay. It could be more or less than you expected. The important thing is that not all mortgages are equal in principle. So be warned and they can give you a misguided sense of security. Make sure you understand the extent of the validation using the lender`s instruction policy and that it includes a credit search. It is important to remember that, in principle, an agreement is not a mortgage offer or official confirmation that you have a mortgage. To do this, you must go through the full application process. The size of your contract can in principle be a useful indicator of how much you can borrow. You can use it to search for real estate in your price range.
Keep in mind that if any of the details you enter, if they change in principle for the mortgage during the validity period (for example, they change jobs), you may need to check with your mortgage broker or lender to make sure that your mortgage is in principle still valid, and renew the application if necessary. At this point, you can easily provide the information without proof. But you will need this when you apply for a full mortgage. You`ll need all of these for your full mortgage application anyway, so you may think it`s a dress rehearsal. This should be self-evident: make sure all the information is correct, or you may be faced with a refusal. Make sure you get advice on products and lenders before pursuing an agreement in principle, as you can leave a soft or hard footprint in your credit file. If you are considering how much money to borrow, the mortgage lender should check your credit history to make sure you would be able to meet the monthly payments. A mortgage in principle is not mandatory, but there are several good reasons to make one. Even if you have obtained an IPA, you may not receive a formal mortgage offer. This can be for a number of reasons, such as.B. if you have recently been declared bankrupt, if your financial history is incomplete, or you have only been busy for a few months.
You don`t need to get an agreement in principle, but it can sometimes help if you`re very handsome (see “How an AIP Can Help,” below).