Two women signing mortgage contract so they can buy their property. SAM Conveyancing's guide on understanding a mortgage offer
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Mortgage Offer

21/12/2022
(Last Updated: 21/12/2022)
22
5 min read
Key Takeaways
  • Once you get your offer, it is confirmed that you will be granted the loan.
  • The offer has a fixed term and you will need to double check and sign it, before being able to go ahead with the house purchase.
  • If you offer expires before completion, you might be able to get an extension.
  • Your mortgage offer can still be withdrawn up to completion, but this only happens in exceptional circumstances.

What is a mortgage offer?

A mortgage offer is the final step in themortgage application process. Once the lender agrees they are prepared to lend you the funds, by giving you a mortgage in principle, the entire process starts. You will need to submit your application and instruct a conveyancer or solicitor to act in your name. The lender will then perform the necessary steps, such as:
  • Checking your credit score
  • Performing a valuation
Before sending you the offer, the lender will require a mortgage valuation to be done on your property. This is meant to prove that the house is really worth how much they will lend you.

These valuations are done to favour the lender and, in most cases, are paid for by the borrower. It is recommended that you get an independent valuation survey. You can find out what a surveyor looks for when valuing a property, so that you know what to expect.

When this is completed, you should get your offer, which is the letter you receive from your lender, confirming that you've successfully passed their checks and that you will be granted your loan.

What happens when a mortgage offer is issued?

When the offer is issued, you can finally move into the final stages of making your purchase.
  • Make any necessary adjustments - you will receive a copy of your offer, which you and you conveyancer can check. It is your responsibility to let the bank know of any changes which may affect your ability to repay the debt.
  • Accepting the offer - This only involves you signing the offer. Your conveyancing agent will then take care of sending it back
  • Buying the property - You can now set a date for exchange of contracts and completion
Generally, offers are valid between 3 to 6 months. Some lenders include the entire application process as part of this, while others specify a date by which you need to complete. Make sure you know if any of this applies to you.

How long does it take from mortgage offer to completion?

You will agree on a timeframe with the seller. Generally, once you exchange contracts, it will take 2 weeks to complete, although you can either reduce or increase the time between exchange and completion.

Mortgage Offer Extension

If your mortgage offer expires before completion, you might be able to get an extension. This can happen due to delays in the conveyancing process or chain, or there might be an error in your mortgage application. Either way, you might be able to get a mortgage offer extension for a month, or maybe more, depending on the lender.

Once you have your offer, it is safe for you to exchange and start thinking about moving day. While you can exchange contracts before having your offer, this involves a higher risk and it is usually frowned upon. Since your offer will have a fixed term, you should be able to complete within that period.

Can mortgage be declined after mortgage offer?

Generally, the offer shouldn't be rescinded, but there is still a risk of this happening, as long as this is done under the terms and conditions previously agreed upon.

If this is done before exchange of contracts, this would only cause delays and you might even need to search for another property. However, should this be done after exchange, you will be forced to pull out of the transaction and pay the penalty fees.

Under normal circumstances, the offer legally binds the two parties involved, however should anything happen that can affect the borrower's ability to repay the loan, then the offer can be withdrawn.
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Laura Cristian - Digital Marketing Assistant - Meet the team - SAM Conveyancing
Written by:
Laura has a talent for data analysis and fact-finding. She is an advertising graduate with a broad range of skills in the web marketing field within conveyancing sector. She works closely with our panel of solicitors and surveyors to understand our clients' needs and challenges and to write the most valuable content for you.
Andrew Boast of Sam Conveyancing
Reviewed by:
Andrew started his career in 2000 working within conveyancing solicitor firms and grew hands on knowledge of a wide variety of conveyancing challenges and solutions. After helping in excess of 50,000 clients in his career, he uses all this experience within his article writing for SAM, mainstream media and his self published book How to Buy a House Without Killing Anyone.

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