Mortgage in Principle

MR_JJO

I have a Mortgage in Principle and have recently made an offer on a property. When speaking with their estate agent, they asked for proof of the mortgage in principle prior to passing on the offer to the seller. Is this the norm or can we refuse to show them this? Only because we have put an offer lower than what our maximum mortgage in principle is and therefore would be showing the estate agents our maximum price we can potentially go up to. Any advice would be greatly appreciated!

househuntingmad

I had the same thing a while ago when I put in an offer.

I told EA I would only produce it once offer had been accepted and not until then, and also that I would be telling the vendor directly that I had put an offer in. EA soon backed down.

Good job, as the vendor didn't accept my offer and I wasn't prepared to go any higher anyway.

Edit : I should say though mine was on a property that had been on the market 6 months and no offers to that point.

Malmo

Do have a mortgage broker? If so, tell the agent that you'd be happy to have your broker confirm that you are good for the mortgage. If no broker, then the lender could also confirm the same.
Alternatively, let them have a redacted copy of the AIP/DIP so that you don't give away the maximum you may be able to borrow.

princeofpounds

Yes, it is normal to show it. If you are concerned that they are judging whether to play a bidding race, then you can either take the approach above and ask for theoretical agreement on price first,


or ask the mortgage company or broker for a copy of the AIP with a lower upper limit,


or if the buyer will accept it ask if second hand confirmation of AIP from your solicitor will do.


The fact is that none of it really protects you that much because nothing is binding until exchange. So try not to lose too much sleep over it and pick the price at which you hold firm.

King_Slayer

Some EA requires this before passing an offer to vendor (although all offers are meant to be passed to vendor) I believe this is to avoid time wasting, so that they know you are likely to obtain a mortgage offer. I would happily do as suggested above or show them your AIP. After all it just shows the amount the lender may be willing to lend, this figure can be higher or lower when full expenditure is taken into consideration. Then stick to how much you're willing to pay.

MR_JJO

Thank you for your responses. I think that i will speak with EA tomorrow and tell them I will show them the MIP once an offer has been accepted

princeofpounds

I believe this is to avoid time wasting, so that they know you are likely to obtain a mortgage offer

An EA has a duty to assess whether any offer is proceedable, to stop the vendor wasting time negotiating with someone who cannot buy it, to the exclusion of other viewers.


Many EAs take that duty too far, in terms of pushing for financial information beyond simple proceedability.


The most common scam is to insist you see their in-house mortgage broker, which is totally unnecessary but a sales opportunity for them.


Also they can sometimes tell the vendor if you can likely afford to be pushed a little harder on the price.


Occasionally they want to put you into a phoney bidding war, using knowledge of your maximum position. That does happen, but it's not all that common.