Also called: Approval in principle, Subject to conditions
Conditional approval
A conditional approval is a lender's agreement to fund subject to specific conditions being met, such as a satisfactory valuation, verification of documents, an inspection or confirmation of insurance. It becomes unconditional once every condition is satisfied.
What is a conditional approval?
A conditional approval is a lender's agreement to fund subject to specific conditions being met, such as a satisfactory valuation, verification of documents, an inspection or confirmation of insurance. It becomes unconditional once every condition is satisfied.
Example
An approval conditional on a satisfactory machine inspection and current comprehensive insurance certificate before funds are released.
Why it matters
Contracts should not be treated as certain until approval is unconditional — conditions do sometimes fail.