Mortgage agreed in principle

TroubledTarts

AskAsk said:

TroubledTarts said:

If you want to be sure of their financial situation instruct your solicitor to do nothing first before confirming your buyers situation with their solicitor before spending any money on anything else.

that is a good point.  is that possible?  i have never done that before but then the EA that I have dealt with in the past have all been very forthcoming with the buyers' financial details, even sendng me screenshots of their bank statement balance in some instances!

Your solicitor works for you, if for peace of mind you need them to do firm the buyers are of good financial standing and ready to proceed as that concerns you the most it's up to you to ask for that and get that confirmation. It may be the solicitor just says yes they are serious and financially ready and that will be it. 

AskAsk

TroubledTarts said:

AskAsk said:

TroubledTarts said:

If you want to be sure of their financial situation instruct your solicitor to do nothing first before confirming your buyers situation with their solicitor before spending any money on anything else.

that is a good point.  is that possible?  i have never done that before but then the EA that I have dealt with in the past have all been very forthcoming with the buyers' financial details, even sendng me screenshots of their bank statement balance in some instances!

Your solicitor works for you, if for peace of mind you need them to do firm the buyers are of good financial standing and ready to proceed as that concerns you the most it's up to you to ask for that and get that confirmation. It may be the solicitor just says yes they are serious and financially ready and that will be it. 

it will be difficult in practical terms as the other side is not obligated to disclose how they are going to fund the purchase, but that they are going to get a mortgage, and the value of which won't be known until the valuation survey had been done.

i don't think they are obligated to disclose how much their client has to fund the deposit as that is not a legal requirement in the conveyance, except that they have the standard 10% deposit.

if I were the EA, i would have thought that disclosing the maximum amount of the MIP was standard and not the 200k that the buyers have in the bank as that is even more personal information than the maximum level of MIP.

vic_sf49

AskAsk said:

Gentoo365 said:

They can't divulge the information unless the buyer wants to share (e.g. as part of the negotiation to show they are able to proceed and have low risk of issue if the lender valuation comes in a bit low).

I would just ask the estate agent whether the buyers have their finances in order and trust the estate agent. Remember the estate agent cares as much as you about this as they only get paid if it completes. 

The fact they have 200k and are considering using less suggests they have some 'buffer' if there are issues. This is a good thing and much better than an FTB maxing out their budget.

i guess you are right but it is frustrating that he doesn't share the information.  i find that EA doesn't always work for the seller and will get duff buyers for you in the hope that you will agree any reduction or the buyer will find a way to fund the purchase.

to them it isn't a big issue as they don't lose any money if the transaction fail, unlike the seller.

A high MIP means that they have a high credit worthiness so it shows how much they can raise.  If someone has a low MIP, then that is all they can raise and no more based on their financial situation.  So it is important to choose someone who has a good ability to raise funds.

Don't people just get a MIP for the amount they want to add to cash, to buy a property, which may be way way below the max MIP they could actually raise?

I got an MIP for £50k, as that was all I needed, but I could have got one many times that. So a low MIP here is meaningless in regards to affordability.

AskAsk

vic_sf49 said:

AskAsk said:

Gentoo365 said:

They can't divulge the information unless the buyer wants to share (e.g. as part of the negotiation to show they are able to proceed and have low risk of issue if the lender valuation comes in a bit low).

I would just ask the estate agent whether the buyers have their finances in order and trust the estate agent. Remember the estate agent cares as much as you about this as they only get paid if it completes. 

The fact they have 200k and are considering using less suggests they have some 'buffer' if there are issues. This is a good thing and much better than an FTB maxing out their budget.

i guess you are right but it is frustrating that he doesn't share the information.  i find that EA doesn't always work for the seller and will get duff buyers for you in the hope that you will agree any reduction or the buyer will find a way to fund the purchase.

to them it isn't a big issue as they don't lose any money if the transaction fail, unlike the seller.

A high MIP means that they have a high credit worthiness so it shows how much they can raise.  If someone has a low MIP, then that is all they can raise and no more based on their financial situation.  So it is important to choose someone who has a good ability to raise funds.

Don't people just get a MIP for the amount they want to add to cash, to buy a property, which may be way way below the max MIP they could actually raise?

I got an MIP for £50k, as that was all I needed, but I could have got one many times that. So a low MIP here is meaningless in regards to affordability.

maybe i do not understand MIP then.  I thought it was the maximum you could get based on your earnings.

TroubledTarts

Proof of funds is a fundamental step of your solicitors.

Solicitors request proof of funds to ensure buyers have the financial means to complete the transaction.

Just ask them to do that as a first stepm you won't get bank statements and finite details just the trust your solicitor has confirmed the buyers have the means to complete the purchase.

If you want more then request that knowing your buyers might find that a bit strange and chose another property.

AskAsk

TroubledTarts said:

Proof of funds is a fundamental step of your solicitors.

Solicitors request proof of funds to ensure buyers have the financial means to complete the transaction.

Just ask them to do that as a first stepm you won't get bank statements and finite details just the trust your solicitor has confirmed the buyers have the means to complete the purchase.

If you want more then request that knowing your buyers might find that a bit strange and chose another property.

proof of funds are quite difficult, especially for a young FTB couple with 200k in their bank account, and these tend to get done way way down the line as solicitors don't want to waste time on this aspect until they know that the sale is going through as if it fails, they won't bother.

i guess i will just have to take the risk and see what transpires but it would appear that my understanding of MIP as affordability is wrong anyway from another response on here.

Hoenir

AskAsk said:

vic_sf49 said:

AskAsk said:

Gentoo365 said:

They can't divulge the information unless the buyer wants to share (e.g. as part of the negotiation to show they are able to proceed and have low risk of issue if the lender valuation comes in a bit low).

I would just ask the estate agent whether the buyers have their finances in order and trust the estate agent. Remember the estate agent cares as much as you about this as they only get paid if it completes. 

The fact they have 200k and are considering using less suggests they have some 'buffer' if there are issues. This is a good thing and much better than an FTB maxing out their budget.

i guess you are right but it is frustrating that he doesn't share the information.  i find that EA doesn't always work for the seller and will get duff buyers for you in the hope that you will agree any reduction or the buyer will find a way to fund the purchase.

to them it isn't a big issue as they don't lose any money if the transaction fail, unlike the seller.

A high MIP means that they have a high credit worthiness so it shows how much they can raise.  If someone has a low MIP, then that is all they can raise and no more based on their financial situation.  So it is important to choose someone who has a good ability to raise funds.

Don't people just get a MIP for the amount they want to add to cash, to buy a property, which may be way way below the max MIP they could actually raise?

I got an MIP for £50k, as that was all I needed, but I could have got one many times that. So a low MIP here is meaningless in regards to affordability.

maybe i do not understand MIP then.  I thought it was the maximum you could get based on your earnings.

Could be any figure up to the maximum. The maximum though could change depending on the property being purchased. It's little more than an indication of good faith that the potential buyers aren't total time wasters. Before MIP's were available a very frustrating process with buyers simply over committing. 

AskAsk

Hoenir said:

AskAsk said:

vic_sf49 said:

AskAsk said:

Gentoo365 said:

They can't divulge the information unless the buyer wants to share (e.g. as part of the negotiation to show they are able to proceed and have low risk of issue if the lender valuation comes in a bit low).

I would just ask the estate agent whether the buyers have their finances in order and trust the estate agent. Remember the estate agent cares as much as you about this as they only get paid if it completes. 

The fact they have 200k and are considering using less suggests they have some 'buffer' if there are issues. This is a good thing and much better than an FTB maxing out their budget.

i guess you are right but it is frustrating that he doesn't share the information.  i find that EA doesn't always work for the seller and will get duff buyers for you in the hope that you will agree any reduction or the buyer will find a way to fund the purchase.

to them it isn't a big issue as they don't lose any money if the transaction fail, unlike the seller.

A high MIP means that they have a high credit worthiness so it shows how much they can raise.  If someone has a low MIP, then that is all they can raise and no more based on their financial situation.  So it is important to choose someone who has a good ability to raise funds.

Don't people just get a MIP for the amount they want to add to cash, to buy a property, which may be way way below the max MIP they could actually raise?

I got an MIP for £50k, as that was all I needed, but I could have got one many times that. So a low MIP here is meaningless in regards to affordability.

maybe i do not understand MIP then.  I thought it was the maximum you could get based on your earnings.

Could be any figure up to the maximum. The maximum though could change depending on the property being purchased. It's little more than an indication of good faith that the potential buyers aren't total time wasters. Before MIP's were available a very frustrating process with buyers simply over committing. 

yeah, if someone makes an offer on a 900k house and has MIP for 810k and 90k deposit, you have to think that they are cutting it close and if anything comes up that needs further funds, the sale will fall through, whereas if someone had 1m MIP and 200k deposit, you have think that they would have a better chance at completing the sale than the other person, especially if the property needs updating as banks tend to value low for properties that need work.

that is what I am getting at as i thought someone would always have MIP of the maximum that they can borrow to see how much they can afford and to show sellers / EA that they are credible with their offer.

WellKnownSid

The MIP is for whatever they've asked for based upon the information given at the time - the mortgage company won't have seen any actual evidence at this point.  A couple of NHS GPs will likely have an easier time than a couple of self-employed content creators.

When it comes to the full application they may go with a different bank if there is a better offer.

If your property has issues (a chip shop underneath, requires a retention, walls made of cheese, etc, etc) they might be forced to find a different lender.

An MIP tells you they are not completely made of straw but the DD is down to the solicitors and the lender.

AskAsk

WellKnownSid said:

The MIP is for whatever they've asked for based upon the information given at the time - the mortgage company won't have seen any actual evidence at this point.  A couple of NHS GPs will likely have an easier time than a couple of self-employed content creators.

When it comes to the full application they may go with a different bank if there is a better offer.

If your property has issues (a chip shop underneath, requires a retention, walls made of cheese, etc, etc) they might be forced to find a different lender.

An MIP tells you they are not completely made of straw but the DD is down to the solicitors and the lender.

so the bank don't do affordability checks for the MIP?  that is, they won't ask to see payslips and bank statements?