Can a Mortgage Offer be Withdrawn on Day of Completion?

Many mortgage offers are valid for between 3 and 6 months. This means you’ll need to get through the buying process as efficiently and quickly as possible. Aspects such as being involved in a chain or the seller taking their time with the process can impact this timeframe. If you are buying a new-build property you might also face delays brought on by construction.

The main thing to consider when buying a house is staying in conversation with your lender. Keeping them informed will mean if the time comes to extend your mortgage offer they can make a decision based on the current situation.

Some lenders might revoke their mortgage offer if you have been made redundant or have lost your job. Another situation might be that you have taken a reduction in income that isn’t the result of a job loss. The lender's decision to withdraw will be based on the application and affordability concerns.

In some cases, your own circumstances might not have any influence. Especially if you and your partner applied and they can personally cover the monthly mortgage repayments. All mortgage lenders want is assurance that you have the funds available to meet the repayments. Communicating with your lender as early as possible will help find solutions.

You can be forgiven for thinking that once you have a formal offer for a mortgage there are no more checks. But a lot of lenders will do a hard credit check to make sure that the money they are lending is secure. These checks are normally carried out around the time of completion. It is done here because there is some time from the mortgage offer to completion.

These checks are normally more thorough than those done during the mortgage in principle stage and even those at the time of the initial offer. The biggest thing they are looking for is that there is no significant change since the initial offer.

The checks include the following:

• Income - Has this changed significantly
• New and additional debts - such as loans or credit cards
• Credit history - checking for missed payments
• Bankruptcy check

Remember not to apply for a mortgage immediately after. Multiple mortgage rejections could impact your credit rating and future mortgage applications. Take the time to understand why it was withdrawn before rushing into another mortgage application.

When making your application for a mortgage your lender will ensure that you have legitimate access to funds. Even after providing you with a mortgage offer, they might run checks on your finances to make sure that this information is still valid. If it is found that you have sourced your finances illegally such as money laundering, the lender is likely to withdraw their mortgage offer.

When applying for a mortgage, lenders require a property valuation. This ensures that they are lending you the correct amount for the property's worth. However, whilst carrying out surveys it might be discovered that the home has issues such as structural problems. Therefore, the lender might withdraw their offer. This is because it impacts the true valuation and may no longer align with the amount originally applied for or accepted by the buyer.

Subsequently, if the process is taking a long time, other properties in the area might be going up in value and so might the house you are buying. As such you might be forced to increase your offer which is accepted. If this is the case, the lender will find it necessary to withdraw the mortgage offer. They will then either provide you with a new mortgage offer to reflect the new purchase price or they may even disagree with the valuation.

It is essential to complete your mortgage application as accurately as possible. If any incorrect information is found on your application, the lender is likely to withdraw the offer, even if the error was unintentional.

In some cases, the lender may request extra documentation to clarify these errors. Ensure that all information provided in your application can be supported by evidence. Working with a mortgage broker can help minimise these risks. They will review your documentation thoroughly and can provide expert advice.

This scheme allows buyers (normally first-time buyers) with lower incomes to purchase a share of their home. This is whilst paying a discounted rate rent on the remaining share.

Essentially you would pay for 25-75% of the property either outright or through a mortgage. You would then pay rent on the remaining 25-75%, with the rent being 10% below market value. The owner of the remaining percentage would be a housing association or similar organisation. This way you can then afford to get a mortgage to buy the property outright.

You can also increase your ownership gradually through a process called ‘staircasing’. This is where you purchase additional shares over time (1% per year for 15 years). Each time you staircase, the rent decreases as your ownership share increases.

If you are struggling to get a 90% mortgage one solution is the mortgage guarantee scheme. It was brought in to make property ownership more readily available to prospective buyers. It allows borrowers to get 95% mortgages from lenders, resulting in 5% deposits.

Whilst you can still get 95% mortgages independent of this scheme, they are proving more uncommon due to lenders' concerns. This scheme has government backing to cover any shortfalls in the event of losses, therefore reducing the lender's risk.

It's important to note that 95% mortgages carry a higher risk of falling into negative equity compared to 90% mortgages. This is due to smaller deposit providing less protection against potential drops in market value.

This scheme is an ideal scenario for first-time buyers. It would also benefit those whose personal circumstances have changed since their last mortgage.