If your mortgage application has been approved, you will be in the fortunate position of having a mortgage offer. This will be great news for you as your mortgage offer means you’re one step closer to exchanging contracts and buying your dream property.
Of course, the home-buying process is rarely straightforward so complications could arise before you’re given the keys to your new home. There might be unexpected delays within the moving chain for one thing!
As such, you might be concerned about your mortgage offer. Does it have an expiry date? Will you need to reapply for a mortgage?
How long is a mortgage offer valid for?
So, how long does a mortgage offer last? A mortgage offer typically lasts for a short amount of time and the start date of the offer will vary. It could begin from the date you applied for your mortgage or from the day when the confirmation letter was issued.
Mortgage offers last between 3 to 6 months but it depends on your chosen lender. You will be able to check the expiration date on the letter they send you.
In an ideal world, of course, you would probably prefer the mortgage offer to last for a lot longer. This is because of the complications that can arise within the house-buying process.
However, lenders are unable to provide an offer for a mortgage for an unlimited period. This is because their offer is based on a number of factors, including your income, your credit rating, local price trends within the housing market, and the lender’s given interest rate.
As these factors are subject to change, they set a time limit, just in case, there is a change of circumstances.
To understand how long a mortgage offer lasts in greater detail, as well as information on getting an agreement in principle, and understanding mortgage offers, check out the rest of this guide and get in touch with us if you need any further details.
What is a mortgage offer?
Once the mortgage lender is happy with your application, they will give you a mortgage offer. This will come in the form of a confirmation letter detailing the amount of money they will be prepared to give to you.
Please note: a mortgage offer is not the same as a mortgage in principle. – What is a mortgage decision in principle?
Mortgage offers are official confirmations of a loan after an application has gone through.
A mortgage in principle also known as an agreement in principle is an indication of what the lender may be willing to give to you before you begin the application process. It gives you an idea of the type of properties you will be able to afford, and you can use it to prove to estate agents and home sellers that you are a serious buyer.
The mortgage in principle is not a guarantee that you will be given an official mortgage offer, as the lender will still need to check your credit history and approve your application before deciding how much money they will be willing to lend to you.
How long does it take to get a mortgage offer?
On average it takes 10 days to get a mortgage offer. It can take a couple of days longer on a house purchase as a survey will be needed therefore you can usually add 3 days.
It won’t take too long before you receive official confirmation about your mortgage from your lender. Assuming you get your paperwork in on time and your application is free of any errors, you should receive your formal mortgage offer in about two weeks.
If there are any issues with your application or if the lender needs to carry out extra checks on your financial situation, you may have to wait a little while longer before you get your mortgage offer.
How to get a mortgage offer
The best way to get a solid speedy mortgage offer is for the application to be packaged well upfront. It’s our experience and we have many examples of mortgage offers taking a long time due to a lack of documents and information.
Get an agreement in principle
You first need to have completed an agreement in principle. The mortgage lender will need the majority of the information they will need for a full application to give you an agreement in principle.
Fill out the mortgage application
then you need to complete the mortgage application and provide your particular lender with the information they ask for. Such information will be related to:
Your financial circumstances
You will need to show evidence of your income and outgoings via your payslips, bank statements, and any other documents required by your lender.
The property you intend to buy
The mortgage provider will want to make sure the property matches the value of the loan you’re applying for. A surveyor will value the house and provide the property valuation report that is needed by the lender.
What happens after I receive a mortgage offer?
Upon receiving the mortgage offer, you will likely jump for joy knowing that your application has been successful!
After this moment of elation, you should then read through the letter you have received and make sure that everything is to your liking.
If you’re happy with the mortgage offer, you need to sign the letter and then return it to the lender. At this stage, it becomes a binding contract between you and your mortgage provider and you will have up to six months to finalise everything you need to do before your house move.
Your solicitor will then move on to the final stage of your house purchase and arrange a date for exchanging contracts with the property seller.
When my formal mortgage offer expires can it be extended?
As we suggested earlier, there may be a few setbacks with your property purchase. In such cases, you should let the lender know, especially if the mortgage offer is about to expire.
Delay out of your control
If the circumstances for the holdup are out of your control, such as a delay in construction work if you’re buying a new build property, you may be granted an extension before your mortgage offer expires. Lenders understand that buyers affected by outside events can’t always complete their property purchases on time so are sometimes quite lenient.
The lender will need a few weeks’ notice, so the sooner you tell them the better. You may be able to find out what notice period they require after their offer has been sent to you.
If your mortgage offer does expire before you complete the property purchase, you will need to re-apply for a mortgage rather than ask for a mortgage offer extension.
You will then need to go through the same process you went through before. This will involve another application, another credit check, and another examination of your personal financial situation by the lender. You might also need to pay for another valuation survey, additional conveyancing costs, and any other additional fees required of the lender.
Can I re-apply for a mortgage with a different mortgage lender?
You don’t necessarily need to stick with the same lender if your mortgage offer expires.
If you spot a better mortgage deal on the market, you could get a mortgage with a different lender.
This is definitely worth considering if you think you’ll be eligible for a lower interest rate. However, before applying for a mortgage, you still need to factor in mortgage lender fees, solicitor’s fees, and the other fees that you would be liable for within the mortgage process.
As such, it is worth speaking to a mortgage broker such as ourselves before choosing a mortgage lender. We will compare mortgages on your behalf and will let you know which mortgage providers are right for your financial situation.
It’s been our experience that the average mortgage offer will last 6 months however be aware that some mortgage lenders’ mortgage offers can last as little as 3 months.
On the other extreme, there are a couple of mortgage lenders that offer the ability to extend a 6-month offer for a further 6 months which can be really helpful if you are not wanting the pressure of a fast mortgage completion. An example of this would be if you are buying a new build property or are in a long chain that can take a long time to complete. Our expert mortgage advisers have many years of experience knowing which mortgage lender will be best for your individual circumstances. – Stephen Roberts
Complete your mortgage before the offer expires
If you’re worried about a delay before you exchange contracts and need advice on mortgage offer extensions, or simply need advice on the best mortgage deals, we are here to help.
Get help from a broker such as YesCanDo Money.
Your appointed representative will provide mortgage advice from application to completion so can discuss your mortgage agreement with you if there are any delays. If the seller’s purchase falls through, for example, or if your new build isn’t ready, we can advise you on what to do next.
In certain financial circumstances, we might also advise you on other mortgage deals. After all, if your existing mortgage offer is about to fall through and you have the opportunity to get a mortgage offer with better interest rates elsewhere, you might want to consider other mortgage providers. We will discuss your options with you to make sure you get the right mortgage for your financial needs and get you through until you exchange contracts and then to your house purchase or remortgage completes.
To learn more, get in touch with a mortgage broker at YesCanDo Money today. We are here to help you throughout your mortgage journey, from the initial query stage to the completion date of the home-buying process.