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. You may be wondering why, in principle, you could first commit to a mortgage instead of just asking for a real mortgage. The simple answer is that it`s faster and less effort to get a mortgage in principle. You can often get a sort in less than an hour if there is no problem, and at most it should only take a few days. This frees you up to go home hunting in seriously, so you are able to make a fixed offer for a home that you make like the look of. It is usually best to use a mortgage broker because he or she will have access to a wider range of mortgages that you can find on High Street or online. You can also save time this way, as your broker can immediately find you the best potential mortgage. This means that once your offer is accepted, you can simply call your broker and ask him to continue the full application instead of having to buy a little more. A mortgage in principle is not mandatory, but there are several good reasons to make one. 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. You may be rejected if you apply for a mortgage in principle, which can affect your creditworthiness. There are some mortgages specifically for those who have bad credit. Your mortgage broker or lender will ask you several questions covering areas such as your income, expenses, the type of work you do, your credit history and the size of your deposit. You need the following information: Most lenders do a “firm” credit search before offering you an agreement in principle that marks your credit file. 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. You must provide basic personal data, including your salary, how much you want to borrow and what your monthly fees add up. 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.