Definition of a bank agreement in principle for a mortgage

An mortgage preapproval (usually translated in french as “agreement in principle”) is a preliminary confirmation that a bank may finance your property purchase based on the information reviewed. In Switzerland, it generally constitutes neither a binding mortgage offer nor a commitment to release the funds.

Bank mortgage approval: what the bank checks

A home loan preapproval based on your income and equity primarily indicates a theoretical property-buying capacity. When it relates to a specific property, the bank also examines its price, lending value and documentation. The document remains subject to a complete application, no material change in your financial position and an acceptable valuation.

Home loan preapproval: its limitations

The preapproval certificate supports your offer, but does not replace either final mortgage approval or the irrevocable payment undertaking. The latter is issued after full approval, signature of the mortgage agreement and provision of the equity. Before paying any deposit, check its validity period, the property concerned, the amount and any reservations.