estate agent asking for mortgage in principal

huwy123

Hi all,

I've just put an offer in on a house and the estate agent asked me to get a "mortgage in principal" before passing on the offer to the vendor. The vendor incidentally is a building society and the house is a repo.

I just wondered whether this is standard practise because at the moment I feel like I'm not being taken seriously...?!?

Cheers,
H

ps - A friend tells me that by law estate agents must pass on an offer within 24 hours! I have no chain and am in a good financial position.

Natty082

I think that many people are putting in offers then not being able to get mortgages that the EA is covering their backs so they don't feel they are wasting the sellers time!

chewmylegoff

huwy123 wrote: »

Hi all,

I've just put an offer in on a house and the estate agent asked me to get a "mortgage in principal" before passing on the offer to the vendor. The vendor incidentally is a building society and the house is a repo.

I just wondered whether this is standard practise because at the moment I feel like I'm not being taken seriously...?!?

Cheers,
H

ps - A friend tells me that by law estate agents must pass on an offer within 24 hours! I have no chain and am in a good financial position.

well you can insist that the agent passes the offer on but they may recommend that it is rejected because you haven't got mortgage finance yet and therefore there is a risk that after accepting your offer they may find that you actually can't pay what you say you will if the bank refuses to lend to you.

it's pretty normal at the moment to be asked if you have a mortgage in principle when putting an offer in. you don't have to pay anything to get a mortgage in principle. some EAs i came across want to know about the mortgage in principle before doing viewings.

_Andy_

Have you had a mortgage provisionally agreed?

AndrewSmith

It is standard practice and has been for a long time. You even find that some sellers won't accept viewings or offers from applicants unless they can prove they have funds in place.

Don't always assume it's the Estate Agent driving these things. It is, again, quite normal for the seller to impose such restrictions on the Estate Agent.

KellsBells

Hello,

I work in repossessions, specifically I am an asset manager.

The Estate Agent is actually unable to put the offer forward to the bank/building society until they are satisfied that you are financially qualified. This means making sure that you have an agreement in principle/mortgage in principle.

If you don't have one, sit down with the financial advisor in their office - you won't be under any obligation to use them.

Please be reassured that this sounds perfectly normal, and in accordance with standard procedure. And FYI, the estate agent is not legally bound to report unqualified offers - only qualified ones.xx

huwy123

Thanks for all the responses - very helpful. I'll arrange a mortgage in principle. The only problem is that it'll have to wait a few days as I've a couple of grand on a 0% CC which I assume is best to pay off from my savings prior to applying.

Doozergirl

huwy123 wrote: »

Thanks for all the responses - very helpful. I'll arrange a mortgage in principle. The only problem is it it'll have to wait a few days as I've a couple of grand on a 0% CC which I assume is best to pay off from my savings prior to applying.

That won't affect the mortgage in principle. It's questionable whether it would affect your mortgage application at all. If your income multiples aren't tight then you're better with the 0% and earning interest in the bank. I'd only pay it if off if you need to

chewmylegoff

huwy123 wrote: »

Thanks for all the responses - very helpful. I'll arrange a mortgage in principle. The only problem is that it'll have to wait a few days as I've a couple of grand on a 0% CC which I assume is best to pay off from my savings prior to applying.

doubt it will make any difference either way. you're only getting the bank's agreement that it will lend to you in principle. when i had this done all they multiplied my salary by their multiple and then subtracted CC debt. they then worked out whether i could afford the repayments if they lent to me on their most expensive deal.

theGrinch

unfortunately, there are an increasing number of people putting in offers without getting mortgage approval first, only to withdraw offers.

its makes good sense although it is not cast iron

lil'H

My mortgage broker told me NOT to get an agreement in principal. He said they are worthless as the mortgage market is changing so frequently. Getting an agreement in principle leaves a mark on your credit record, which could affect you when you come to actually apply for a mortgage. If you go with a good broker they can tell you what you can get and with who, then mine has told me to tell agents to call him if they aren't happy. Everytime I've told agents what the broker said and who my broker company is (they are one of the biggest) amazingly the EA has shut up and they are still putting me forward to vendors as a buyer with finances in place.