When applying for a mortgage, so much focus is put on the application itself, you might not be aware of what happens after your application is accepted and an offer is issued. Your mortgage offer will normally arrive in the post and will outline exactly how much your lender is willing to let you borrow.
In some cases, it will also have the conditions of your offer attached. For example, the lender might want you to pay off another loan or credit card before they let you have the loan.
So, what happens next? In this article we will look at what you can expect, including what to watch out for and how long you’ll have to wait until everything goes through.
What happens after you get your mortgage offer?
Double check the offer
Before you accept the offer, you should thoroughly check through everything to make sure you’re happy. The offer you receive should detail how long your mortgage is for (the mortgage term), how much you will have to pay each month, what the interest rates will be, whether there are any fees for paying it off early (early repayment charges) and more.
You’ll probably already know all of these details from your application, but it doesn’t hurt to check them over one more time. A mortgage is a big commitment, and you don’t want to end up with something you regret in the future.
Accept the offer
As long as you’re happy with the offer, you next have to inform the lender that you want to proceed with the sale. Your conveyancing solicitor will guide you through what you need to do, but normally you will simply need to sign and return the mortgage offer. It is very quick and easy and often can be done online.
If there are any specific terms or conditions tied to your offer, your conveyancing solicitor may also ask you to sign a memorandum of understanding. This is an agreement between you and your lender that will confirm that you accept the conditions they have set out.
Finish buying the property
When you have accepted your mortgage offer, your solicitor can finish sorting the legal aspects, known as conveyancing, ready for your house purchase to go through. In England and Wales, this involves putting in a date to exchange contracts, which means you are legally committed to buying the property.
How long is it from mortgage offer to exchange?
Generally, you will be able to exchange contracts about 2 months after you’ve submitted your mortgage application, but this will depend on how quickly your solicitor can get everything ready. There can be a lot of waiting involved when it comes to getting a mortgage, but it is worth it in the end when you get the keys to your home.
How long after a mortgage offer is completion?
Completion refers to when the whole property sale goes through, and you officially own your home. Usually, completion takes place around 1 to 3 months after you have received your mortgage offer. However, this can vary greatly depending on how fast your solicitor is able to get all the information they need about the property, as well as whether you are part of a chain (if so, you will need to wait until everyone in the chain is ready to complete at the same time). So, in terms of how long it is from mortgage offer to completion it can be different based on your own personal situation.
Can a mortgage be refused after the offer is accepted?
Yes, until your house purchase fully goes through, your mortgage offer could still be withdrawn if your circumstances change. This is because your lender has offered you a mortgage based on what they know about you, your income, and the property you are buying. If any of these factors change it could invalidate the offer.
Even though it is rare for a lender to do any further checks on your finances after sending you a mortgage offer, you have a legal obligation to inform them if there have been any changes to your income or employment status. The same also applies if the purchase price of the home you’re buying changes.
To ensure your offer remains valid, you will want to avoid doing anything unusual. This means that you shouldn’t change jobs until after the purchase has gone through, don’t take out any new loans or credit cards, and try to complete as soon as possible to reduce the chance of something going wrong.
If you have any questions or queries about the mortgage application process, contact Finance Advice Centre today. Our expert advisers are on hand to guide you through everything you need to find and apply for the right mortgage product to suit your financial situation.
As a mortgage is secured against your home, it could be repossessed if you do not keep up the mortgage repayments.