If you`re in the market for a new home or considering refinancing your existing mortgage, you may have come across the term « mortgage agreement in principle ». This is a document that outlines how much you may be able to borrow from a lender based on your income, employment status, credit history, and other factors. But how long does a mortgage agreement in principle last? Let`s explore.
First of all, it`s important to note that a mortgage agreement in principle is not a guarantee of a mortgage offer or approval. It`s simply an estimate of how much you may be able to borrow based on your financial circumstances. You`ll still need to go through the formal mortgage application process and meet the lender`s criteria to obtain a mortgage offer.
That being said, the validity period of a mortgage agreement in principle can vary depending on the lender. Some may only offer a validity period of a few days, while others may offer up to six months. It`s best to check with the lender you`re considering to find out their specific policy.
In general, a mortgage agreement in principle is typically valid for around 30 to 90 days. This gives you a decent amount of time to house hunt and make an offer on a property, knowing roughly how much you can afford to borrow. However, it`s worth keeping in mind that your circumstances can change during this time, such as a change in employment or credit score, which could affect your ability to borrow.
If your mortgage agreement in principle expires before you find a property or are ready to proceed with a formal mortgage application, you can always reapply for a new one. However, keep in mind that multiple applications can affect your credit score and may not look favorable to lenders.
In summary, the validity period of a mortgage agreement in principle can vary depending on the lender. It`s typically valid for around 30 to 90 days, but it`s best to check with the lender for their specific policy. Remember that it`s not a guarantee of a mortgage offer or approval, and your financial circumstances can change during this time. Always seek professional advice before making any major financial decisions.
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