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Step 3 - Get approval in principle (AIP)

How mortgage approval in principle (AIP) works

Before looking for your next home, you should get mortgage approval in principle. Please note that this is not a formal agreement and is typically only valid for 6 to 12 months. If you don't find a property within this timeframe, you will need to reapply. However, depending on the lender, if your circumstances don’t change, your original approval in principle may be extended. 

Preparing for your mortgage application

The lender will ask for: 

  • Proof of I.D., address and Personal Public Service Number
  • Proof of income from Revenue, payslips or certified accounts  
  • Current account and credit card statements

They will also carry out a credit assessment to consider your application by looking at certain factors: 

  1. Your employment status: Are you employed or self-employed? What are your prospects? 
  2. Your age: Most lenders have a limit of 65 or 70 for the age at which your mortgage is paid off. Therefore, the age you are when you apply for the loan will affect its term and the repayment amounts.
  3. Affordability: They will need to know your salary to calculate the multiple amount they can offer. This is decided based on your income versus your expenses and existing debt.
  4. History of repayments: The lender will check your credit record on the Central Credit Register (CCR).
  5. Managing money: They will look at your accounts to see how you manage your finances. Excessive spending or debt in the past may cause concern.

Getting your finances in order

You'll be in a stronger position with the lender if you show a pattern of sound financial management. To help make a great first impression, here are some things you can do: 

  • Ask the CCR for a copy of your credit record. If there are any inaccuracies, you have the right to get them amended.  
  • Avoid missed payments – regularly meet all debt payments on time. 
  • As far as possible, clear any credit cards or overdrafts. To see how long this would take, use our Credit card balance calculator.
  • Show the lender that you can repay a mortgage. This can be done by saving monthly to build up your deposit.  
Top tip

When agreeing your mortgage term with the lender, remember that defaulting on repayments will affect your credit rating and your ability to borrow in the future. Therefore, don't extend yourself. Always allow room in your budget for unexpected costs. 

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