To reach an agreement in principle, you must contact a mortgage lender directly or through a mortgage broker. 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. Whether the maximum amount you can afford is visible to the real estate agent depends on the type of mortgage that was issued to you in principle. 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. If you have had credit problems in the past or have a limited credit history and are not sure what a bank or construction credit union might lend you, an agreement in principle could give you extra security from your credit perspective. A wholesale mortgage is exactly what it looks like — an indication of what a lender can actually borrow. It remains conditional on you being able to meet the mortgage criteria in practice, and is not a promise or guarantee. 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. A policy decision shows that one can theoretically afford to buy a property. This could make you a more attractive buyer and set you apart from other potential buyers.

If you remortgaging, there is less need for this information, so you would file an agreement in principle once you have chosen a lender and a product. The purpose of an IAP is to give you a clearer idea of how much you could afford to borrow. This means that you can browse properties in your price range and you finally want to put an offer on one! 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. An AIP does not guarantee your loan, as it is not a mortgage offer. And if the lender finds something you haven`t mentioned before that has a negative impact on your ability to get a mortgage, they might change their mind about whether they lend to you, how much they would borrow and what the interest rate will be. 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. You may be rejected if you apply for a mortgage in principle, which can affect your creditworthiness. You must provide basic personal data, including your salary, how much you want to borrow and what your monthly fees add up.

You don`t need to go through the full application process to get an agreement in principle. This will come later if you have accepted an offer on a property. 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. 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.