How long does a mortgage offer last?
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How long does a mortgage offer last?
Paul Collinson explains the process of a mortgage offer and how everything works.
What is a mortgage offer?
It’s an offer from a lender following the full mortgage application process. It’s the final point of that journey.
What’s the difference between a mortgage offer and an Agreement in Principle?
An Agreement in Principle is the step after we check affordability, ensuring everything fits with a lender. It involves a search on your credit file to check for anything that might lead to a decline on a lender’s automated system.
At that point, your application isn’t assessed by an underwriter. It’s only on full mortgage application that a mortgage underwriter reviews things and goes to a full hard footprint on your file.
A mortgage offer is produced after that full assessment. A property valuation would have taken place and the offer means the lender is happy to proceed.
What documents do I need to provide to get a mortgage offer?
The documents will all be supplied ahead of the mortgage application. If you’re employed, it will require the latest two months payslips, showing your basic salary. If you receive an annual bonus, you might need P60s for the past two years.
If you’re self-employed, we need your latest two years’ SA302 tax calculations and tax year overviews. For both the employed and self-employed, we need your latest three months’ bank statements and either a licence or passport as ID.
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How long does it take to receive a mortgage offer?
Generally it takes around two weeks from the mortgage application being submitted. I’ve had mortgage offers the same day or within one or two days – and that is pretty good. More usually, within two weeks you should have one.
What happens once your mortgage offer has been issued?
When a mortgage offer is issued, your mortgage is sorted and the solicitors then can carry on with their work. That involves a Land Registry search and flood risk searches, and they also raise enquiries with the seller’s solicitor.
Do I need to complete within a certain amount of time?
Yes, after the mortgage offer is produced, it’s normally valid for six months. It’s good to aim to get your purchase or remortgage completed a good time before that, if possible.
Sometimes certain issues come up, but as long as they are resolved quickly, there shouldn’t be a problem to get it done within the six months.
How long do mortgage offers usually last?
It’s normally six months, but a very small number of lenders have a three month expiry on a mortgage offer. There is usually the possibility to extend that at the time, as long as things are progressing. Some new build offers actually last nine months.
What happens if my mortgage offer expires?
Sometimes if things are progressing a lender may offer some leniency and extend that offer. If they can see that progress has been made by your solicitors, they will normally extend it for a short period.
How do I reapply if my mortgage offer expires?
If we do get to the point where we need to start again, we’ll look for the most suitable deal and obtain fresh documents from you. We would have to repeat the full application if they won’t allow us to extend any more.
Can mortgage offers be extended?
Yes, they can be sometimes, depending on where you are in the process.
Can a lender withdraw my mortgage offer?
Yes, they sometimes can. They might do another credit check to ensure no further credit or loans have been taken, or if there have been any issues like missed payments between offer and completion. It’s important to be aware that they might run these checks.
How can a mortgage broker help here? Have you got anything else to add?
We’ve pretty much covered everything there. Just give us a shout here at Brick2Brick if you have any questions. We can guide you through the process and help with anything you need.
YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP WITH YOUR MORTGAGE REPAYMENTS.
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