When you make an offer on a house the estate agent will ask to see proof of funds. Here’s why they are asking and what you may be asked to provide.
Yes. When you’re buying a house, the estate agent will ask for proof of funds for a number of reasons:
Your proof of funds for a house purchase could come in various forms such as:
Get fee free mortgage advice from our partners at L&C. Use the online mortgage finder or speak to an advisor today.
It’s also an estate agent’s legal duty to ensure that you are who you say you are, so they’ll ask you for proof of your current address and your identity. So you’ll be asked for some of the following forms of proof of identification.
You don’t have to show proof of funds until you make an offer on a property. Some estate agents may ask to see it earlier. There’s nothing wrong with doing this, but if you don’t want to you don’t have to. Showing evidence you have the funds in place means you are a serious buyer.
When you buy a property, your mortgage lender and solicitor/ conveyancer will also ask for proof of where your money has come from. So be prepared to show your proof of funds several times.
Looking for a mortgage or agreement in principle? Speak to fee-free mortgage brokers L&C or use the online mortgage finder service today
No, you do not need to see the estate agent’s in house mortgage broker. We hear of instances of estate agents referring buyers to their mortgage broker under the pretence that they will need to validate the source of funds for a house purchase under Anti-Money Laundering regulations. This is simply a sales tactic to get you speaking to the mortgage broker and using their in-house provider – for which the estate agent will get a referral fee.
Note that it is also illegal for the estate agent to say you have to use their mortgage broker in order to get first sight of houses new to market or in order to make an offer.
Read more about why you should avoid estate agents’ in-house services and what you should do or get in touch with us at hello@hoa.org.uk if you think you are missing out because you won’t use the estate agent’s mortgage broker or solicitor. It’s important that with such significant financial decisions like getting a mortgage, you are able to shop around to find the best deal.
Looking for a mortgage or agreement in principle? Speak to fee-free mortgage brokers L&C or use the online mortgage finder service today. They search over 90 lenders to find you the best deal
Arrange an Mortgage Decision in Principle today with the mortgage experts at L&C
If you are receiving money from abroad to help you buy a house, this causes a problem with Money Laundering Regulations. It is possible that your solicitor will decline funds if the money is coming from a high-risk third country or someone who is connected to a high-risk third country.
Under the current rules in the UK, high-risk third countries include Algeria, Angola, Kenya, Namibia, Nigeria and Vietnam. For a full list, visit the Law Society’s website.
This depends on when the agent is asking to see bank statements and why. Estate agents should only ever ask to see bank statements regarding your proof of deposit (or the whole amount if you’re a cash buyer). If you’ve saved up your funds over time, you’ll need to provide bank statements going back over the period of time you saved up the money.
Most people buying with a mortgage stump up a deposit as well. As well as showing a mortgage agreement in principle, expect to be asked to show proof of your deposit too. This means providing a bank statement showing you have the cash or showing evidence that your current home is on the market if you are using its sale to fund your next property.
You are classed as a cash buyer if you can afford to buy a property outright, without a mortgage. This means an estate agent will need to see evidence that you have the money as well as where it has come from. It is the legal responsibility of the estate agent to check your funds are not the proceeds of crime under anti-money laundering laws.
HomeOwners Alliance Ltd is registered in England, company number 07861605. Information provided on HomeOwners Alliance is not intended as a recommendation or financial advice.
Mortgage service provided by London & Country Mortgages (L&C), Unit 26 (2.06), Newark Works, 2 Foundry Lane, Bath BA2 3GZ, authorised and regulated by the Financial Conduct Authority (FRN: 143002). The FCA does not regulate most Buy to Let mortgages. Your home or property may be repossessed if you do not keep up repayments on your mortgage.
HomeOwners Alliance Ltd is an Introducer Appointed Representative (IAR) of Seopa Ltd, for home insurance, authorised and regulated by the Financial Conduct Authority (FCA FRN: 313860).
HomeOwners Alliance Ltd is an Introducer Appointed Representative (IAR) of LifeSearch Limited, an Appointed Representative of LifeSearch Partners Ltd, authorised and regulated by the Financial Conduct Authority. (FRN: 656479).
Independent Financial Adviser service is provided by Unbiased, who match you to a fully regulated, independent financial adviser, with no charge to you for the referral.
Bridging Loan and specialist lending service provided by Chartwell Funding Limited, registered office 5 Badminton Court, Station Road, Yate, Bristol, BS37 5HZ, authorised and regulated by the Financial Conduct Authority (FRN: 458223). Your property may be repossessed if you do not keep up repayments on a mortgage or any debt secured on it.