Mortgage approval in principle
A lender's written statement of how much it will lend you, subject to a valuation and final checks. Estate agents often ask for it before taking an offer.
What it means
Approval in principle (AIP) is the lender saying it will lend you up to a set amount once you find a property and it is satisfied with the valuation and paperwork. It is not a binding offer.
The amount depends on your income, savings record, existing debts and the Central Bank mortgage measures: 4 times gross income for first-time buyers and 3.5 times for second and subsequent buyers.
Once you go sale agreed, the lender orders a valuation and moves to a formal loan offer. Drawdown happens just before the sale closes.
Example
For a first-time buyer couple on a combined €80,000, the loan-to-income rule caps approval in principle at €320,000.