Once you’ve received a mortgage offer, you’re well on your way to collecting the keys and taking your first steps into your new home. But complications often arise and cause delays, and that’s before you consider the holdups in the aftermath of the pandemic.
That in mind, it’s useful to know how long your mortgage offer will last so any expected delays can be mitigated, and you can complete on your purchase in good time. This guide has been created to help you do just that.
What is a mortgage offer?A mortgage offer is the official documentation you receive to confirm that your application for your chosen property has been checked and approved by your lender.
Until you receive a mortgage offer, you will be unable to proceed in the process any further.
How to get a mortgage offer confirmedYour mortgage offer will be confirmed once you have worked your way through the mortgage application and provided your lender with the requested details surrounding the following:
Your financial circumstances (income, expenses, outstanding debts, credit score, etc.)
The property you want to purchase (you’ll need a valuation report confirming the value matches what you’re planning to pay).
How long does a mortgage offer last?All mortgage offers are valid for a fixed amount of time. Typically, they will last between 3 - 6 months, depending on the lender. All Mortgage providers work to different criteria, so it’s worth checking the offer length in advance if you expect delays.
The start date of an offer usually begins the day it is issued, although some lenders will start the clock from the day you first apply. The expiration date will be detailed on the documentation they send you.
How long does it take to receive a mortgage offer?How long it takes to receive a mortgage offer will vary from lender to lender, and also depends on a number of other factors such as the property you want to buy and how quickly you submit your paperwork.
In most cases it shouldn’t take longer than two weeks from completing your application to receiving a formal mortgage offer. Sometimes it can take longer, as the process involves rigorous checks on your finances, and the lender may conduct its own valuation on the property you want to buy.
What happens after I receive a mortgage offer?Once you receive your mortgage offer, you will need to read through it, accept and sign - provided you’re happy with it. Your solicitor can then move on to the final stage of the process in which a date to exchange contracts can be agreed with the seller.
This is the point in which you are legally committing to buying the property, so be sure you’re absolutely certain about your decision before proceeding with this step. If any of your circumstances have changed since you applied for your mortgage offer you must let your lender know before you exchange as this could invalidate it.
Before you complete and receive the keys to your property, it is at this point you’ll pay your deposit. You’ll also need to cover the solicitor fees, stamp duty (if applicable) and any other associated costs.
Can a mortgage offer be extended?All mortgage offers will have an expiration date, but there may be certain circumstances in which your lender will authorise a mortgage offer extension.
If you’re buying a new build property it’s fairly commonplace for lenders to allow offer extensions of an additional 3 - 6 months, as there are often delays in construction. Extensions may also be permitted in exceptional circumstances to buyers affected by events outside their control, such as the pandemic.
The terms of a mortgage offer extension may involve:
Extending the mortgage offer as it is.
Re-valuation of the property
Changing your mortgage deal.
Complete before your mortgage offer expires with the help of a brokerIf you’re holding back on applying for a mortgage due to concerns that your mortgage offer will expire before you’re able to complete, why not ask a broker for advice about your situation?
Whether you have concerns regarding construction delays on your dream property, a predicted fluctuation of income, or perhaps you’re just not sure how to get your finances in order, our team is at hand to help.
We can provide assistance throughout the entire mortgage process, from application to completion. And with access to over 100 UK mortgage providers ranging from highstreet banks and building societies to specialist lenders, we may be able to find you an even better deal than what you’ve already found.
Give us a call on 02380 980304 or submit an online enquiry and a member of the team will be in touch.
Mortgage offer FAQsOnce you’ve received an offer on a property, the countdown is on. But what happens next, and what happens if things don’t go to plan? Here are some of the most common questions we receive about mortgage offers.
How long does it take to complete after receiving a mortgage offer?The time taken to complete your purchase can vary massively case by case. Best case scenario it can take as little as one or two weeks, sometimes sooner, although most lenders take at least five working days to release the funds.
In most cases however the process can take several weeks, sometimes months. There are a number of reasons completing your house purchase can take longer, such as:
You have problems accessing the money you need to pay the deposit and other fees.
You wait until you exchange to give notice on your current rental property.
The seller’s new purchase falls through.
Can a lender withdraw my mortgage offer?If your circumstances change during the time in which you submit your application and you receive a mortgage offer, your lender is within their rights to withdraw it.
Such circumstances include:
Losing your job.
Critical health problems.
A decrease in value of the property.
That being said, if there’s a genuine change of circumstances which could inhibit your ability to make your repayments of your mortgage, you’re probably best off calling off the purchase before exchanging contracts.
If the house-buying process is taking longer than expected and your mortgage offer is in danger of expiring, it’s worth asking your mortgage provider if you can have an extension.
What happens if my mortgage offer expires?
While some circumstances may be unforeseen, it’s best to inform your lender as soon as possible if there is some indication of a holdup.
The earlier you do this the better, as some lenders have a minimum notice period and it’s generally easier to obtain an extension if you give them advance warning that you may require extra time.
How do you reapply if a mortgage offer has expired?Sometimes circumstances beyond your control will prevent you from completing on a property before your mortgage offer expires.
If you’re unable to get an extension, the only option is to reapply and follow the same process as before. As well as being frustrating and time consuming, it’s worth remembering that you will have to undergo another hard credit check, which could impact your score.
But there’s no need to panic too much; as long as your circumstances haven’t drastically changed in the intervening period, the chances are your application will be reaccepted by the provider.
What’s the difference between a mortgage offer and an agreement in principle?Before you begin a property search, you might request a mortgage agreement in principle (AIP). Sometimes referred to as a mortgage in principle (MIP) or decision in principle (DIP), this is not to be confused with a mortgage offer.
An AIP is when a lender gives you an indication as to how much they are willing to lend you based on the details you’ve provided surrounding your income, expenditure and outstanding debt.
An Agreement In Principle is usually valid for between 30 - 90 days and gives you a good indication as to how much you could potentially borrow based on your financial circumstances.
This means you can start narrowing down your house search within your specific price range, and helps demonstrate to sellers and estate agents that your purchase intentions are genuine.