Buying a property is never a fast-paced process and it can be made even slower when chain breaks or legal hurdles get in the way. Delays such as these can soon see you wondering if the mortgage offer that you secured some time back will remain valid. Luckily, in most cases, you’ll be fine. Whilst time limits between lenders may vary, a typical mortgage offer lasts for three to six months. Hopefully giving you plenty of time to navigate the issues that may have suddenly arisen.
It’s worth noting though, as we mentioned above, that this is dependent on the lender. Some count the time of validity differently from others which could sometimes work against you if you keep encountering difficulties in finalising the house purchase.
In this blog we look at mortgage offers and how long they last so you can put your property plans into place and hopefully avoid delays and problems along the way.
What is a mortgage offer?
A mortgage offer is your approval by a lender for the money to be loaned so that you can purchase a property. In most cases, these will come from a bank or specialist mortgage lender. It will be detailed with not only your information but that of the property too and the terms of the mortgage. Without a mortgage offer, you can’t secure the property so you must have one in place.
Is a mortgage offer the same as an agreement in principle?
No. Think of it as the mortgage offer is the official confirmation that a lender is willing to lend you the money to buy a property. It includes detailed affordability checks and a confirmed offer of the amount being lent. An agreement in principle, or AIP, is where the lender states they would be open to lending you money for a property purchase. The AIP only lasts around 90 days, and in some cases less, so you need to apply for your mortgage officially within this timeframe otherwise you’ll need to source a new agreement in principle.
Just because you have an agreement in principle, there is no guarantee you will be approved for a mortgage.
How long does it take to get a mortgage offer?
A mortgage offer will only be made once you have completed the application process and proven you meet the affordability criteria set out by the lender. Alongside this, the lender will have a valuation made on the property to ensure that the amount being lent matches the value of the property and that the price being asked for the property is realistic.
This means that you can expect a mortgage offer to be made within four weeks of you submitting your application. It can take longer though if you do not provide information when requested or the property has an unusual valuation which may require double checking.
It all depends on the lender. Many have certain processes they work through, and some can take longer than others. The best advice we can give is for you to have everything checked through before you complete your application and collate any information that may be needed. This way should the lender have any questions, you can answer them immediately and avoid any delays.
How long will a mortgage offer be valid for?
In most cases, lenders will allow a mortgage offer to be valid for 3-6 months, but this is all dependent on the lender. A mortgage offer is valid for a fixed amount of time, but this time all depends on how the lender operates.
For example, some lenders make their mortgage offers valid from the day it is issued, others begin it from the day you apply, and some may have a very specific date listed for its expiry. You should check this with a lender once you have found a property as their terms and conditions may not align with your plans.
This is perhaps even more important when buying a new build home. In many instances, a new build is known as “off-plan”. This is where the property is not yet finished but is scheduled to be by a certain date. You’ll need to ensure your mortgage offer fits in line with that. In some cases, you might be able to extend the mortgage offer.
Can you extend a mortgage offer?
In some cases, you can, but you must approach the lender with sufficient notice of your wish to extend. With new build properties, as we mentioned above, there are often delays and lenders understand this. As a result, they are often happy to extend a mortgage offer by up to six months if necessary.
Other reasons may also see an extension be granted, especially if the reasons for requesting it are out of your control.
A lender may also put specific terms in place should an extension be required. These could see the property revalued which changes how much you need to borrow; they could see you offered a new mortgage deal with new rates, or they may simply keep everything as it is and just extend it by a set period.
Is a mortgage offer legally binding?
A mortgage offer is the lender’s official offer to you for a loan of a specific sum of money. You can refuse it if you wish. Just remember, you may have spent money already on various stages of the property process and these may need to be paid again if you want to start over. A mortgage offer becomes a legally binding document once you complete on your purchase and you have bought your new home. Your solicitor will organise an exchange of contracts which means the property becomes yours. If anything has changed with your personal circumstances before the contracts exchange, you must inform the lender as you could find your mortgage invalidated!
Can a mortgage offer be withdrawn?
A lender has the right to withdraw an offer if they believe your circumstances have changed enough to see a loan as a significant risk. This could be a job loss, a severe health issue or a drop in the value of the property.
Mortgages can be tricky and that is why our team of expert advisors can help you navigate your way through them. Whether you need help finding a first-time-buyer mortgage or are curious about a mortgage offer for a buy-to-let mortgage, we are on hand. Our experience is wide-ranging, and our team is friendly, ensuring you get the best advice from a real free mortgage broker. Why not contact us today and see how we can help you get the mortgage offer you need?
