Buying
Approval in Principle: what lenders check before they say yes
Approval in Principle, or AIP, is a lender's written statement that it would lend you up to a certain amount, subject to the property and final checks. Estate agents usually ask for it before they take your bids seriously.
What lenders check
- Income: payslips, the Employment Detail Summary from Revenue and a salary certificate from your employer.
- Spending and saving: six months of statements for every current and savings account. Lenders look for regular saving and no missed payments.
- Debts: car finance, personal loans and credit cards reduce what you can borrow, and the lender sees them on the Central Credit Register.
- Deposit: where it comes from, including a gift letter if family is helping.
- Identity and address: a passport or driving licence, a recent bill and your PPS number.
My journey lists these documents in steps 8 to 10, so you can tick them off as you collect them.
How much they will offer
The Central Bank limits mortgages to 4× gross income for first-time buyers and 3.5× for everyone else, and the loan to 90% of the price. Within those limits, the lender tests whether you could still afford the repayment if rates rose.
Lenders can make exceptions for a small share of their loans each year, so a strong application sometimes gets more.
How long it lasts
An AIP usually lasts six months. If it expires before you go Sale Agreed, the lender asks for recent statements and payslips to renew it.
It is not yet a loan offer. The offer comes after the valuation and the final checks on you and the home.
Avoiding surprises
- Clear small debts, and avoid new credit in the six months before you apply.
- Avoid gambling transactions and large transfers you cannot explain. Lenders read every line.
- Keep your job steady if you can. A change during the process can pause the approval.
- Get your own report from the Central Credit Register first, so nothing on it surprises you.
Worth knowing
Applying to more than one lender, or through a broker, lets you compare what each would offer before you commit.
