An Agreement in Principle (AIP) is a lender's conditional approval for financing based on your creditworthiness, income and general financial situation. It essentially means that the lender has looked at your circumstances and determined the maximum amount they are willing to lend you for a mortgage. Generally, you need to provide information about your income, employment status, credit score, which will normally be a soft credit check, and debt situation to your lender to obtain an AIP. After reviewing this, the lender may issue an AIP certificate outlining the terms of the mortgage. This will allow the estate agents you are purchasing from to evidence that they have seen your ability to borrow the amount of loan that you need, along with proof of the deposit that will be necessary. Agreements in Principle can be great for you as a homebuyer because it gives a clearer understanding of what you can afford and allows you to shop for a property within your budget. Just remember that an AIP is not a mortgage guarantee, and you must still go through the usual application process before the loan is finalised.