Even if it is not a full mortgage application, you must still provide information to obtain an agreement in principle. A mortgage in principle is not mandatory, but there are several good reasons to make one. 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. In principle, you will receive a mortgage online, over the phone or, if you apply from a bank or real estate credit company, in a branch. Even if your mortgage is accepted in principle, your full mortgage application could be rejected at a later date. For example, if the lender only performed a gentle credit check, it may not have seen it all in your credit file. Other information may be revealed when searching for a full mortgage application. A difficult search appears in your file as a credit request. While the difficult search itself should not affect your creditworthiness if many difficult searches are done on your file in a short period of time, lenders who review your credit history later for your full mortgage application, you may think that you have been turned down several times for loans and decide not to grant yourself credit.
A mortgage in principle is an official estimate of how much you can afford to borrow on a mortgage. This can be a very useful thing if you are looking for a first home (or a second lot) because it shows the realtor that you are a serious buyer and that any offer you make is realistic. To reach an agreement in principle, you must contact a mortgage lender directly or through a mortgage broker. In principle, a mortgage agreement is followed by a full mortgage application and the information provided in the original decision is accompanied by referrals. It is therefore important that the facts made available to the mortgage lender be correct for the first time, as the erroneous information of their insurers is reprehensible and may lead to rejecting your case or changing the terms they are willing to offer. Some lenders will give you a certificate if they offer in principle a mortgage that can be useful to show real estate agents. What this entails differs depending on the lender, but could be a) an explanation that they are willing to lend the amount requested for b) the maximum amount they may be willing to lend, or c) simply a statement that your mortgage was accepted in principle. If you have an agreement in principle and decide to make a full application with that lender, you must provide more detailed personal data. The lender is not required to lend you the full amount indicated in the AIP. When we surveyed more than 3,000 homeowners in July 2019, 53% said they had an agreement in principle before applying for their mortgage. About 25% said they didn`t know or didn`t remember having one, and only 25% said they didn`t. An AIP mortgage typically takes up to 90 days and can help speed up the application process for a formal mortgage, as a lender can use the AIP to complete your application.