The size of your contract can in principle be a useful indicator of how much you can borrow. You can use it to search for real estate in your price range. A mortgage offer is the formal document that a mortgage lender issues to a borrower and confirms that the lender is happy to give the money and form the mandatory contract between you and the mortgage lender. However, it is only in very rare and extreme cases where this could happen, how the mortgage offer works or change the circumstances of the borrower. Realtors will often want to make sure that you will be able to get a mortgage on a property before making an offer, so it may be helpful to have an agreement until that date. If it expires before you need it, you can still apply it, but be careful if you ask for too many agreements in principle, as it only takes a few credit requests to damage your credit score. Even if it is not a full mortgage application, you must still provide information to obtain an agreement 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. However, it is important to note that it is in principle offered. If you make a formal application for the mortgage itself, the lender has the right to change the details of the agreement or it may decide not to grant you the loan (for example. B if your financial situation has changed). If you leave for a long period between getting a mortgage in principle and applying for a mortgage, you may find that interest rates have changed or that you may find a better offer elsewhere. While your credit history has been impeccable so far, the accumulation of missed payments and arrears on your credit report, just before formally applying for a mortgage, will put more emphasis on whether your current circumstances make you a good potential customer. Also, many real estate agents (or sellers) won`t even consider taking a home off the market if you don`t have an AIP, because that means they have no idea if you`re ever considered by a mortgage lender for the amount of money you want to borrow.