Receiving a mortgage offer is a massive milestone in the quest for purchasing your new property
However, you may have noticed that your mortgage offer has an expiration date, and if you don’t finalise your purchase by this date, your mortgage offer may not be valid.
That could mean starting the process over again and even losing money.
While you’ll be keen to get the purchase of the house completed as soon as possible, there are a lot of factors that can delay the purchase of a property or a mortgage application.
Reserving early can leave you at the mercy of the construction company who are responsible for the build being on time.
If there are delays in the supply chain that affect their materials being delivered to the site in good time, or staff shortages because of illness, progress might slow down
Usually, six months is enough time to complete a new-build purchase but if they do and you begin to run out of time, you might need an extension for your mortgage offer
Some lenders offer specialist new-build products which allow for up to nine months or more for the process.
Your current living address should be completely uniform across all forms of identity you use within your application. If things need to be corrected, you’ll have to wait for all parties involved in the process including the seller and your solicitor, to read through them and sign again
If there’s a surge of demand for their services and they experience a busy period, that could mean your application goes back to the end of their to-do list
A mortgage broker can help you with a mortgage application so you avoid delays caused by errors like these. It’s their job to notice the little details that make all the difference.
This can be frustrating so if you’re hoping for a speedy application, ask your conveyancer if they have any upcoming breaks that might affect your property purchase going through
Your conveyancer also needs to check that all necessary planning permissions and building regulations approvals have been obtained because, without this knowledge, your lender won’t approve your loan as they’ll want to be sure that the property meets applicable standards and regulations
You would hope that your lender would arrange for their valuation of the property as soon as possible but if they’re experiencing a high influx of applications or, if they’re just not that efficient, you might have to wait.
For example, during the Coronavirus pandemic, some lenders agreed to provide a three-month extension for their mortgage offers because of delays caused by the lockdown.
They’ll require proof of earnings for the last six months to ensure nothing has changed to the stability, regularity or amount of your income.
If you’ve changed jobs, your income has fallen or you’ve taken on more debt, your lender may see these new circumstances as a risk and reject your application.
This could mean that any fees you’ve paid so far will have to be paid again, such as mortgage application fees, solicitor’s fees and valuation fees
If the new valuation deems that your property is worth more, you might have to stump up a bigger deposit or apply for a larger mortgage. That certainly won’t be the case for everyone though and in some cases, the property you want to buy might even be valued lower.
If you are rejected for a mortgage offer extension, know that it’s not the end of your hopes for homeownership. It can even be an opportunity to find a new mortgage product altogether and that could result in you finding a better deal.
A mortgage offer usually lasts for 6 months and in that time the market could have changed, interest rates could have gone up or down, house prices could be different or new homeownership schemes like the First Homes Programme could affect the overall cost of buying a property
While that’s not ideal, there will also be lenders who completely understand that delays happen and with the help of a broker you can find them, rather than apply with your current lender or one that you’re unsure about and get knocked back
A broker with experience in dealing with the type of mortgage you need, i.e. a first-time buyer or buy-to-let mortgage can look specifically for lenders that they believe are more likely to accept you despite your last mortgage not going through because you missed the offer expiry date.
You might even be in a better position financially, perhaps your salary has increased, or your credit score has improved, resulting in the potential for a better mortgage that saves you money in the long term.
Speak to one of our expert advisors today and they’ll answer any questions you have and give you actionable steps for what to do next.
However, you may have noticed that your mortgage offer has an expiration date, and if you don’t finalise your purchase by this date, your mortgage offer may not be valid.
That could mean starting the process over again and even losing money.
How long does a mortgage offer last?
Most mortgage offers tend to be valid for 3-6 months; however, all lenders are different, and it’s always worth double-checkingWhile you’ll be keen to get the purchase of the house completed as soon as possible, there are a lot of factors that can delay the purchase of a property or a mortgage application.
Why might a mortgage offer expire?
Things like the weather, spelling mistakes on your mortgage application and the conveyancing process can each play their part in slowing things down, resulting in you missing the final date for your mortgage offer.You reserved a new build early
There are lots of advantages to reserving a plot on a development early, like selecting the house or flat that you really like rather than resorting to the best out of the ones left, or securing an incentive like free turf for your garden or a fitted kitchen, depending on the developerReserving early can leave you at the mercy of the construction company who are responsible for the build being on time.
If there are delays in the supply chain that affect their materials being delivered to the site in good time, or staff shortages because of illness, progress might slow down
Usually, six months is enough time to complete a new-build purchase but if they do and you begin to run out of time, you might need an extension for your mortgage offer
Some lenders offer specialist new-build products which allow for up to nine months or more for the process.
The weather
One of the things that can affect a building being completed on time, whether a new-build or self-build, is the unpredictable and ever-changing British weather. If the country were to experience harsh and wet weather or snow, that could halt the build, meaning your move-in date will get further away.Mistakes on your mortgage application
Mistakes with your address and inaccurate or missing information on your mortgage application can slow down the process of buying a house too. Your mortgage application has to be flawless, without any typos, spelling errors or inaccurate informationYour current living address should be completely uniform across all forms of identity you use within your application. If things need to be corrected, you’ll have to wait for all parties involved in the process including the seller and your solicitor, to read through them and sign again
If there’s a surge of demand for their services and they experience a busy period, that could mean your application goes back to the end of their to-do list
A mortgage broker can help you with a mortgage application so you avoid delays caused by errors like these. It’s their job to notice the little details that make all the difference.
Delays in the conveyancing process
Sometimes, delays will be completely out of your hands, like your solicitor or the seller’s solicitor being on holiday, or poorly communicating information to all relevant partiesThis can be frustrating so if you’re hoping for a speedy application, ask your conveyancer if they have any upcoming breaks that might affect your property purchase going through
Your conveyancer also needs to check that all necessary planning permissions and building regulations approvals have been obtained because, without this knowledge, your lender won’t approve your loan as they’ll want to be sure that the property meets applicable standards and regulations
Your lender doesn’t arrange a valuation in good time
A typical mortgage valuation only lasts around 30 minutes but if the mortgage lender you choose takes their time organising for one to happen, that could cause a delay.You would hope that your lender would arrange for their valuation of the property as soon as possible but if they’re experiencing a high influx of applications or, if they’re just not that efficient, you might have to wait.
Can I get a mortgage offer extension?
Most lenders are reasonable when it comes to mortgage offer extensions but you’ll need to tell them why as soon as you can, to give them enough time to make their decision and avoid further delays.How long can I extend my mortgage offer?
All being well, you might be able to get an extension of a month but in some circumstances, some lenders might agree to provide an extension of three months or even more.For example, during the Coronavirus pandemic, some lenders agreed to provide a three-month extension for their mortgage offers because of delays caused by the lockdown.
What could stop me from getting my mortgage offer extended?
Your lender doesn’t have to agree to the extension and they might decide to reject your request to do so.They’ll require proof of earnings for the last six months to ensure nothing has changed to the stability, regularity or amount of your income.
If you’ve changed jobs, your income has fallen or you’ve taken on more debt, your lender may see these new circumstances as a risk and reject your application.
How to minimise the risk of needing a mortgage offer extension
Work with a mortgage broker from the start
They’ll communicate the relevant information to the necessary parties involved like the developer, lender and your conveyancer. This reduces the risk of hiccups caused by miscommunication and it’s always helpful to have a professional who knows the process manage it for you, chasing up on your behalf so you don’t have to.Know when your mortgage offer expires
Write it down on your phone or on a calendar so you know how long you have left until everything needs to be finished.Check the progress of your application
If the property you’re buying is a new build, keep on top of each stage of construction so you can preempt any delays early. Your developer should keep in touch with you and your broker to keep you informed.Tell your lender you need an extension early
If you need an extension, don’t delay and let your lender know as soon as you can. They might be reasonable and extend the offer or at least provide advice on whether they have an alternative product that could serve you better.What happens if I’m unable to get an extension?
If your mortgage lender refuses to extend your mortgage offer, and unfortunately, in some circumstances, they will, the only option is to apply for a new mortgage.This could mean that any fees you’ve paid so far will have to be paid again, such as mortgage application fees, solicitor’s fees and valuation fees
If the new valuation deems that your property is worth more, you might have to stump up a bigger deposit or apply for a larger mortgage. That certainly won’t be the case for everyone though and in some cases, the property you want to buy might even be valued lower.
If you are rejected for a mortgage offer extension, know that it’s not the end of your hopes for homeownership. It can even be an opportunity to find a new mortgage product altogether and that could result in you finding a better deal.
A mortgage offer usually lasts for 6 months and in that time the market could have changed, interest rates could have gone up or down, house prices could be different or new homeownership schemes like the First Homes Programme could affect the overall cost of buying a property
Will I be able to get another mortgage if my last one didn’t go through?
A recent mortgage application on your credit report can be seen as a red flag by a potential new lender and they may wonder why the mortgage didn’t go ahead.While that’s not ideal, there will also be lenders who completely understand that delays happen and with the help of a broker you can find them, rather than apply with your current lender or one that you’re unsure about and get knocked back
A broker with experience in dealing with the type of mortgage you need, i.e. a first-time buyer or buy-to-let mortgage can look specifically for lenders that they believe are more likely to accept you despite your last mortgage not going through because you missed the offer expiry date.
You might even be in a better position financially, perhaps your salary has increased, or your credit score has improved, resulting in the potential for a better mortgage that saves you money in the long term.
Onwards and upwards
If you’re worried that your mortgage offer is going to expire before you can complete on your property, don’t panic because there may still be time or an alternative solution. It’s our job to explore your options and help you decide what to do in such an event - you’d be surprised at just how common it is to miss the offer expiry date.Speak to one of our expert advisors today and they’ll answer any questions you have and give you actionable steps for what to do next.
First Time Buyers Expert Article by
Kiran Singh
(Mortgage & Protection Specialist)
The Mortgage Hut