Although the lender wants to evaluate more of your information and documents in order to approve the full mortgage, the agreement is in principle a solid indicator that you will be able to sort through the full signed application and complete the process of buying the home. Once you have decided to start the house hunting seriously, you are in principle asking for a mortgage. Apart from its practical applications, it will help you focus on and engage in your task. Knowing what you can afford, even in theory, gives a huge boost to trust. The objective of an agreement in principle is to give the mortgage lender a timely guarantee of its loan will. It is a matter of establishing hard facts about the applicant`s personal circumstances. A mortgage in principle can also save time in the purchase process, both in terms of accepting your offer and speeding up the mortgage application process. A mortgage in principle – also known as the Agreement in Principle (AIP) or decision-in-principle (DIP) – is a written indication from a bank or real estate credit company (the lender) that indicates the amount it might be willing to grant you. It`s not binding (they could always deny you a mortgage on these terms), but it`s a very useful indicator of what you can probably borrow, and real estate agents take them seriously. An agreement in principle (AIP) – also called Mortgage In Principle (PMI) decision – is a written estimate or statement from a lender to say how much money it would lend you if you bought a property. A mortgage is not in principle a formal mortgage offer, nor is it a guarantee that the lender will give you a mortgage in the future.
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. 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. A mortgage can normally last between 60 and 90 days, depending on the lender. If you have not found a property or accepted an offer during this period, you may need to receive another one. Renewal should be easy, unless your circumstances (or economy) have changed significantly.