All mortgage offers will have a fixed time they will be valid for. In the majority of cases this can range from three to six months. The timer normally starts when the offer has been issued, but some lenders will start to count the days from when you first apply. Others may specify a date by which you must complete the purchase, so it is important that you find out how long your mortgage offer is valid for before signing.
If you are buying a new-build property, you might be able to get an extension on your mortgage offer of between three and six months. Banks and building societies might also provide mortgage offer extensions to buyers that have been affected by events that were out of their control.
How long does it take to complete after a mortgage offer?
Ideally, you will complete the purchase of your new home within one or two weeks of exchanging contracts with the seller. It is possible to do it in less, but most mortgage lenders require five working days to release the funds. Completing your house purchase can also take longer if:
- You’re renting a property and can only give notice when you have exchanged
- You don’t have immediate access to the money you need to pay the deposit or fees like Stamp Duty
- The seller’s onwards purchase falls through
To help you complete as quickly as possible, you should make sure any cash you need is held in easy access accounts and give notice on your rental accommodation before exchanging (although you will need a place to live if the purchase falls through). Keeping in regular contact with your solicitor or conveyancer will always help as people often feel that solicitors cause delays.
Can you extend your mortgage offer?
Mortgage offers are designed to expire after a certain time, but you might be able to extend your offer under specific circumstances. For example, during the coronavirus pandemic, lenders agreed to help buyers who had exchanged contracts by providing mortgage offer extensions of up to three months. If you’re buying a new-build property, you might also be allowed to extend your mortgage offer by up to six months if the construction gets delayed. The terms of a mortgage offer extension might involve:
- Extending the mortgage offer as it stands
- Delaying the start date of your mortgage deal
- Extending your mortgage deal
Can a mortgage offer be withdrawn?
Your mortgage lender can decide to withdraw your mortgage offer if your circumstances change when the offer has been made. Changes that could lead to your offer being withdrawn include:
- Losing your job
- Becoming unable to work because of ill health
- The property losing value
However, it is rare for a mortgage lender to reassess your finances after making the final checks prior to issuing your mortgage offer. If you are concerned about your mortgage offer being withdrawn, one way to protect yourself is to complete your purchase as soon as you can after exchanging contracts. When you do, you will reduce the risk of being contractually obliged to buy a property with no way of paying for it. Although, if you are worried about being able to afford your mortgage repayments, cancelling the purchase before you exchange contracts would be the better move.
What happens after your mortgage offer is issued?
If you are happy with your mortgage offer, the first thing you should do is accept and sign it (often this can be done online). Your solicitor or conveyancer can then start the last part of your purchase, which entails agreeing a date to exchange contracts with the seller. If you are buying in England, Wales, or Northern Ireland, this is when you are legally committed to buying the house. In Scotland it is called a ‘missive’, meaning after you have exchanged the binding contract, neither you nor the seller can back out without having to pay a cancellation charge.
So, if anything has changed since you applied for your mortgage offer, it is essential that you tell your lender before exchanging in case it means your offer is not valid anymore. To complete and get the keys to your new home, you will also need cash on hand to cover any deposit, your solicitor’s fees, plus any extra expenses such as stamp duty.
The length of time it takes to go from mortgage offer to completion could span from five working days to multiple months or more. It can be based on other factors such as whether your purchase is part of a property chain.
If you have any questions or need more information regarding mortgages contact Finance Advice Centre today. Our experienced advisers are here to help you find the most suitable mortgage products for you and guide you through the entire process, so you have the best chance of being accepted by a lender.
As a mortgage is secured against your home, it could be repossessed if you do not keep up the mortgage repayments.