EA / Landlord asking for Mortgage Approval Letter

roofi

Hi there,

I've viewed a property which was not a turnkey as tenants are living there and need some money to spend before move (All carpets needs replacement, Paint work, Garden need some money to spend as well etc.).
I made an offer 10k less than asking price last week and EA replied my email asking for Mortgage Approval Letter.

I had my previous Mortgage Approval Letter with maximum purchasing amount lower than my offered price to this particular property but my bank has already approved verbally that increasing the maximum purchase figure is no problem as I have shown them my savings in some investment but still take a week or two to get official Mortgage Approval Letter which I have already explained to EA.

For the time being, I have forwarded him previous mortgage approval letter with lower maximum purchasing price than the offer I made.

I rang EA to check if he has received my email and enquired about who said Vendor wants to check that funds are available from my side to buy this property. So neither he accepts nor he defers this offer and said will come back to me tomorrow morning.

Any idea what exactly EA / Vendor wants to check either my buying power or they genuinely want to check my fund availability. Is this a sign that Vendor / Ea asked for my mortgage approval that they are flexible to accept my offer?

I know my maximum purchasing figure on approval letter (I will get next week) is higher than offer I made. What exactly EA and vendor are looking to check with my Mortgage Approval Letter?


Thanks in advance.

awec

You should have sent it with the amount blanked out.

They have no need to know how much you have to spend, they just need to know that you are not a time waster and have already got mortgage approval.

Sending the figure just completely reveals your hand. If you send your new letter to them and they see you have more money to spend than your current offer what do you think they are going to do?

brownej

Your bank can supply you with a letter that states that you are approved in principal for a mortgage. It does not need to state the amount for which you are approved.
As has been stated above you are showing your hand to the estate agent by letting him know the amount for which you are approved.

roofi

brownej wrote: »

Your bank can supply you with a letter that states that you are approved in principal for a mortgage. It does not need to state the amount for which you are approved.
As has been stated above you are showing your hand to the estate agent by letting him know the amount for which you are approved.

Thanks Brownej,

Its usually below are mentioned on Approval in principle letter:

- Maximum Purchase Price
- Repayment Term
- Interest type : Fixed Term or Variable etc.
- Issue / Expiry Date of approval letter
- Full Name(s) and Address

What do you think which should or should not be on the letter?
Should all information leave as it is on letter except Maximum Purchase Price before forwarding this letter to EA / Vendor?

Thanks.

brownej

roofi wrote: »

Thanks Brownej,

Its usually below are mentioned Approval in principle letter:

- Maximum Purchase Price
- Repayment Term
- Interest type : Fixed Term or Variable etc.
- Issue / Expiry Date of approval letter
- Full Name(s) and Address

What do you think which should or should not be on the letter?
Should all information leave as it is on letter except Maximum Purchase Price?

Thanks.

You need to talk to your mortgage advisor in your bank. They are used to this and will be able to issue you with a letter straight away.
It is not a mortgage approval letter. In my case it was just a brief letter from the bank stating that I was approved for a mortgage on X date.
So on your list above only the approval date and the name and address are listed on the letter.

roofi

brownej wrote: »

You need to talk to your mortgage advisor in your bank. They are used to this and will be able to issue you with a letter straight away.
It is not a mortgage approval letter. In my case it was just a brief letter from the bank stating that I was approved for a mortgage on X date.
So on your list above only the approval date and the name and address are listed on the letter.

Hi Brownej,

I contacted my bank today in mortgage section and I was told that they can only issue me one letter with complete details on it as they cannot amend that letter which is bit strange as in that way the only way I can hide my maximum purchase limit by deleting it while scanning before I can forward it to vendor/EA.

Any advise?

Thanks.

brownej

roofi wrote: »

Hi Brownej,

I contacted my bank today in mortgage section and I was told that they can only issue me one letter with complete details on it as they cannot amend that letter which is bit strange as in that way the only way I can hide my maximum purchase limit by deleting it while scanning before I can forward it to vendor/EA.

Any advise?

Thanks.

Looks like you're stuck so. You'll have no option but to black out the bits the estate agent shouldn't see. You should scan it onto a computer and black it out there rather than damaging your offer letter.

I was dealing with a mortgage advisor in my local branch and she was very friendly and accomodating.
She was the one who told me I would probably need a separate letter as evidence for the estate agent and that I shouldn't really let them know my maximum loan amount.

spaceHopper

They probably don't care about the amount so plank it out. They just want to make sure you aren't a dreamer and have actually gone to the bank. When you get your letter ask your solicitor to write a letter say, RE address .... I can confirm they my client has finance in place to purchase this property

Mr. Incognito

The EA is NOT entitled to your mortgage approval letter.

I would tell him to f off.

the_syco

roofi wrote: »

I know my maximum purchasing figure on approval letter (I will get next week) is higher than offer I made. What exactly EA and vendor are looking to check with my Mortgage Approval Letter?

Hello phantom bidder. What's that? You want to match OP's figure?

roofi

the_syco wrote: »

Hello phantom bidder. What's that? You want to match OP's figure?

the_Syco,

I'm not a phantom bidder but has been trying to make a deal to buy a reasonably priced house for family so I won't regret whole of my life that I have bought over priced house that doesn't have value at the end.

Bank didn't give me correct Maximum Purchase price which I have asked them again and that's why I've mentioned I will get it in a week time with a maximum purchase price higher than the last figure I was approved.

By the way what is OP's figure?

Thanks.

the_syco

roofi wrote: »

By the way what is OP's figure?

OP is "Original Poster". IE; you.

My point was that by showing your hand to the seller, you may be opening yourself to a fleecing. Whatever you hoped to underbid, the seller may hold out knowing that you can afford a better price, and may play you against yourself by introducing a phantom bidder to push up the price to what they know you are approved for.

davo10

Mr. Incognito wrote: »

The EA is NOT entitled to your mortgage approval letter.

I would tell him to f off.

Of course he is not entitled to it, nor is he required to consider the op's offer. Showing proof of funds can tip the balance in the op's favour, a refusal on the other hand will lead the vendor to suspect that the op either doesn't have the funds or, is only at the application stage and applications are not always successful.