Securing a mortgage is a crucial step when buying a home. Once a lender has approved your mortgage offer, you have a limited time to complete the property purchase.
From this stage, the conveyancing process will continue, preparing for the exchange of contracts and the completion of your purchase. You may also want to arrange a survey on the home.
We explain what happens once the offer is approved and everything you need to know about the length of mortgage offers and what to do if your offer expires.
Mortgage Offer Approved: Next Steps
Once a mortgage offer is issued, the purchase must be completed within the time frame set by the lender. This allows for the following to take place:
Reviewing Mortgage Offer
Both you and your conveyancer will receive copies of the mortgage offer from your lender. You must read this carefully and raise any queries with either the lender or your conveyancer. This includes looking into the mortgage terms and any special conditions that may have been added by your lender.
Review Conveyancer's Comments
Your conveyancer will send you their notes and findings after they review your offer. This includes flagging anything out of the ordinary and ensuring you understand the terms of the mortgage and the expectations of the lender.
Sign Contract with Lender
After you and your conveyancer have reviewed the offer and are happy to proceed, you will need to accept the offer by signing a contract with the lender. This allows you to continue with the purchase knowing you have the funds to do so.
Take Out Home Insurance
Mortgage lenders will require you to have buildings insurance when taking out a mortgage. This covers the structure of the building including the walls, roof, and any fixtures included with the property. It is also recommended to take out contents insurance, so your belongings are protected. This is usually done once contracts have been exchanged.
Final Steps and Completion
Completion day is the final stage and marks the finalisation of the transaction. The Title Deed is sent to the buyer and the buyer’s solicitor will forward funds to the seller’s solicitor. The seller must vacate the property and the buyer can collect the keys. From this point, you will begin to repay your mortgage.
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How Long is a Mortgage Offer Valid For?
Your mortgage offer is usually valid for three to six months, depending on the lender.
What About Mortgage Offers for Off-Plan New-Build Homes?
A mortgage offer can expire or be due to expire before the construction is complete on a new build property. Developers may overrun their timeframes or there can be delays which can set back the planned completion of property development.
With an off-plan property, buyers often reserve properties before construction begins. With most mortgage offers lasting in the region of six months, any delay in the building process can cause the mortgage offer to expire before the home is completed.
According to the New Homes Review Annual Report 2019, only 64% of new-build homes were built on time. This is an improvement from 2017 which saw just 59% of homes completed on time.
Some buyers choose to work with a mortgage broker to explore options with longer offer periods or deals designed for new-build homes.
Can a Mortgage Offer Be Extended?
Yes, a mortgage offer can be extended. If you are concerned your house purchase won’t be completed within the time frame of the mortgage offer, contact your lender as soon as possible.
Lenders understand that each house purchase is different and there can be unexpected delays along the way. Even so, the lender is under no obligation to extend or re-offer the mortgage.
Are There Any Requirements?
When approving an extension on your mortgage offer, your lender may ask to see your most up-to-date bank statements and payslips. This is to check your financial circumstances haven’t changed. Lenders must ensure that mortgage candidates are in a position to pay back the loan.
Different lenders have different notice periods for considering extensions, so it’s helpful to be aware of their individual timelines.
How Long Can the Offer Be Extended?
How long the mortgage offer is extended is at the discretion of your mortgage lender, but it could be a month or more. It will depend on your individual circumstances and the property sale.
What If I Have to Reapply for My Mortgage?
If your mortgage offer expires, you may be able to submit a new application with the lender.
If your circumstances have changed from the time the offer was first made, the lender must ensure you are still a good candidate for a mortgage. If your credit score has increased or interest rates have gone down, you could be in a position to receive a better mortgage offer than your original agreement.
When reapplying, you may need another property valuation and to pay additional conveyancing costs. You will need to undergo another credit check, so it's important to have your financial affairs in order.
Some people choose to consult a mortgage broker to help them explore their options and navigate the mortgage application process.
Finding a Conveyancer
An essential part of the house-buying process is finding a reliable conveyancer. Compare My Move can match you with up to 6 conveyancers and conveyancing solicitors in your area. Fill in our conveyancing comparison form to compare quotes and save on your solicitor fees.
Our conveyancing partners have passed a strict verification process to join our network. This includes being regulated by one of the following:
Solicitors Regulation Authority (SRA)
Council for Licensed Conveyancers (CLC)
Law Society of Scotland (LSS)
Law Society of Northern Ireland (LSNI)
Chartered Institute of Legal Executives (CILEX)
FAQs
How Long Does It Take To Get a Mortgage Offer?
The average time for a mortgage application to be processed in the UK is between 18 to 40 days.
To read more see: How Long Does It Take To Get A Mortgage Offer?
How Long Does It Take From Mortgage Offer to Completion?
According to the Yorkshire Building Society, the time between obtaining a mortgage offer and completing can vary from a couple of weeks to a few months. It will depend on whether you are in a property chain and if there are any complications along the way.
Can a Mortgage Offer Be Withdrawn?
Yes, a mortgage offer can be withdrawn by a lender. If your financial circumstances change and there is potential for risk with their investment, they may feel that you are no longer a desirable candidate for a loan.
Can I Get a Mortgage Offer Before I Find a Property to Buy?
No, you cannot get a mortgage offer before knowing what property you are buying. Part of the terms of the mortgage offer are based on the property and its value.
You can get a Mortgage Agreement in Principle before finding a property, giving you an idea of how much you could borrow. It is not a formal mortgage offer but can show estate agents and sellers that you are a serious buyer.
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