What Does “approved in Principle” Mean?
The term “approval in principle” is a real estate term used when a lender pre-approves a borrower assuming that the borrower meets certain requirements, according to the lender Tesco Bank. When borrowers are approved in principle, they must still submit information to the lender to receive a firm approval.
Lenders such as Tesco Bank give borrowers a limited amount of time after the approval in principle to submit the necessary documentation for a final decision. The deadline for filing paperwork after an approval in principle depends on the institution, with institutions such as CitiBank providing a two-month window and lenders such as HSBC offering only a 14 day limit. An approval in principle may also be referred to as pre-approval or conditional approval.