What does 'substantiate the mortgage ' mean please?

Jami74

Have tried to make an offer on a property but estate agents say I have to have a meeting with them to substantiate the mortgage before an offer can be accepted. I haven't applied for the mortgage yet (have AIPs) because I thought we did the survey bit first. They wouldn't tell me what information they'd want, just that nothing could proceed without it.
Please can someone explain in simple terms what it means and what information I should have ready?

propertyrental

They'll want to know that you can afford the property. That includes whether you'd get the mortgage you want/need.

Of course they'll also use this as an opportunity to earn commissionm by arranging the mortgage for you.........

You'll need evidence of your income, along with financial commitments eg car lease, credit cards etc etc

kingstreet

Make sure the affordability, deposit and credit situation all stacks up so they can try to flog you their services under the guise of their vendor wanting it all done "in house" because last time it all fell apart, or words to that effect. Solicitor too, usually.

Nice little earner for them. Sale commission, mortgage and protection commission and solicitor referral fee.

Brie

Wouldn't supplying a copy of an AIP suffice?  Why give them all sorts of details they don't actually need given it'd be crazy to get them to arrange the mortgage and solicitor?

eddddy

Well, an online dictionary defines "substantiate" as "to show something to be true, or to support a claim with facts".

So in simple terms, they want to ask you about your mortgage situation. So they probably want to see your AIP(s).


But as I'm a cynical person, I'd suspect that they also want to try to sell you their mortgage services at the same time. (So they make some money.)

i.e. They want to give you the impression that you have to spend 45 mins listening to their hard-sell, otherwise you cannot submit an offer (which wouldn't be true).


It's up to you how you play it. For example, you can...

• Go along and pretend to be interested, to get them on your side - but never actually go ahead with their services

• Refuse to go along - but you might have to get quite assertive, and put up with their protests

Or I guess you might actually want to use their services

Jami74

Yeah I've already organised broker and told them on the phone. They said our offer could not be accepted or declined without this meeting. I'm struggling to get more time off work at the moment so would rather just email them AIP.

jonnydeppiwish!

Just tell them they can speak to your broker - insist that they forward on your offer to the vendor. If they refuse, post the offer to the vendor direct, stating that the EA refused to pass it on.

eddddy

Jami74 said:

Yeah I've already organised broker and told them on the phone. They said our offer could not be accepted or declined without this meeting. I'm struggling to get more time off work at the moment so would rather just email them AIP.

In your position, I'd put your offer in writing (in an email) with a copy of the AIP.  And say something like:

"I don't want to waste my time and your time with a meeting, if the seller then rejects my offer amount.

So please pass my offer to the seller. If the seller confirms that they will accept the offer, subject to substantiation of my mortgage, we can look for a good time to meet."


And if you want to get a bit heavy with them, you could add...

"If you decide not to pass my offer to the seller, please confirm that the vendor has given you written instructions not to do so."



Because most Estate Agents are members of the Property Ombudsman Scheme, and here's an extract from their mandatory Code of Practice (which is based on the law)...

9. Offers

9a By law, you must tell sellers as soon as is reasonably possible about all offers that you receive at any time until contracts have been exchanged unless the offer is an amount or type which the seller has specifically instructed you, in writing, not to pass on. You must confirm each offer in writing to the seller, and to the buyer who made it, within 2 working days


https://www.tpos.co.uk/images/codes-of-practice/TPOE27-8_Code_of_Practice_for_Residential_Estate_Agents_A4_FINAL.pdf

EssexHebridean

I'd second the suggestion to send an email to tell them that you're not able to attend a meeting, but here is the AIP which should suffice to enable them to pass your offer on to the vendor...

Wyndham

I wouldn't even send the AIP at this stage, but I would send an email to insist the offer is passed on to the vendor.

If you are looking at a house for a certain value, and your AIP is for that value plus some more, they may try to get you to raise your offer. By sending the AIP you've indicated that you could pay more. Best avoided.

Jami74

Thanks all. I've had confirmation that the offer has been passed on and I've emailed a copy of the AIP.