The benefits of obtaining an agreement in principle go beyond the certainty that it will bring you as a buyer in France. It also sends a very clear message to potential suppliers. The guarantee of prior financial authorization makes you a much safer bet as a buyer who fulfills the obligations of closing the purchase. You are therefore a more attractive offer than unfunded real estate applicants and this should make you play into the game when it comes to negotiating a price for the purchase. In its review before the Court of Cassation, Nergeco put forward several arguments against this reasoning, in particular that a person cannot contradict himself to the detriment of another person in application of the principles of fraus omnia corrumpit and the fairness of judicial proceedings. What Gewiss France did exactly to the detriment of Nergeco by appealing and pursuing the decision of the Lyon Court of Appeal of 15 December 2005. Another advantage of the agreement in principle is that it does not bind you to a particular mortgage product. If you find the property, it may be part of a slightly different project than originally planned. For example, some renovation work may be done or rental conditions may vary. It is important to note that an authorisation is significantly different from an agreement in principle (sometimes called a decision in principle (PID) or prior authorisation). In France and the United Kingdom, obtaining an AIP is very simple.
It`s basically a certificate (or, in some cases, an email) that you can get from a bank after your first phone call with the sales team (or, in the UK, you can often apply online at major High Street banks that also do a credit check). In France, banks offer you an AIP as soon as they have asked questions about your income and expenses, and they will indicate that, based on this information, you should be eligible for a mortgage with this lender. You can also tell yourself what the maximum size of the credit could be. However, while this gives you an indication of what you may be entitled to, it`s not a guarantee, whatever they may tell you. (Remember, these are the banks` sales teams, they have no mortgage qualifications and aim to introduce potential customers into their system, not the number of mortgage offers that are issued… . .