Approval in Principle (AIP) is generally an indication from a lender that they may be willing to lend you a certain amount of money subject to specified conditions.
In other words, the property is security for the home loan.
Getting a valuation provides assurance to the lender that the property is a suitable security.
What does home loan approval in principle mean?
Approval in Principle (AIP) is an agreement with a bank. Based on your credit history and financial health, a bank will decide whether to approve your home loan. There’s no actual loan that takes place when you get AIP; rather, it’s a guarantee that the bank will extend you the loan when you need it.
What does Bond approval in principle mean?
The bank will initially provide Approval in Principle. This means that the bond value has been approved but is still subject to the bank finding value in the property and the loan amount requested.
How long does it take for approval in principle?
Approval in Principle: 1-2 weeks
You’ll need to provide documents for final review by a mortgage underwriter, but your lender will cast their eye over the application, just to be sure. This process will usually take one to two weeks, and after that, you’ll receive your ‘Approval in Principle’ letter.
What does sanction in principle mean?
Put simply, a Sanction in Principle is your bank saying that, based on your proof of income, the evidence of repayment capacity you’ve provided and based on your deposit, they will give you a mortgage in principle of a certain amount.