Even if it is not a full mortgage application, you must still provide information to obtain an agreement in principle. Most lenders search for “hard” credit before offering you an agreement in principle that leaves traces in your credit file. If you have a mortgage in principle, you can show sellers that it is likely that you can afford the property you want to buy. This could help if you choose between more than one buyer. If you are worried about bad credit, a mortgage could in principle give you an idea if a lender thinks you can afford to pay off your home loan. A decision in principle is not a guarantee. If you go through the full application process, the lender will take a closer look at your income and credit history. You can choose not to give yourself credits at this point. Make sure you get advice on products and lenders before pursuing an agreement in principle, as you can leave a soft or hard footprint in your credit file. 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. 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. 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.
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. Lenders will probably conduct credit checks if you are applying for a mortgage in principle. However, some lenders may do “soft research” and others “difficult research.” A flexible search records credit quality verification as a query, while a difficult search indicates that you have applied for credit. If you have too much difficult research in your credit report, this may suggest to lenders that you may have difficulty repaying your loans.