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An agreement in principle, also known as a “decision in principle,” “mortgage promise” or “mortgage in principle,” is a certificate or statement from a lender indicating that it would lend you a certain amount “in principle.” To make sure you can borrow the amount you`ll probably need to buy a property, you can normally apply for a mortgage. We have looked at what you need to prepare for in order for you to reach your agreement in principle the first time. Once you have the agreement, you usually have six months have your opinion to decide. This can give you flexibility, as you can choose whether or not to accept the mortgage agreement within that time frame. 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. Once you have your agreement in principle, you can see real estate within your specific price range; that is, the amount you could possibly borrow, plus each deposit you may have saved. The lender will carefully review your financial history, including bank statements, salaries and any additional income, employment history and address, how much deposit you have, and all other savings. This is called accessibility control. 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. For example, some lenders will only allow mortgages on a number of homes or dwellings in a new subdivision. Other examples could be those of an unusual building requiring complete renovation or where the property has increased risk factors, such as. B the risk of flooding or subsidence.

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). You can complete the entire process online – it should in principle only take about 15 minutes to get a mortgage. Filling out online forms with some lenders can even make you an immediate offer. It may take longer if you do it over the phone or in the store.