Sammie Ellard-King
I’m Sammie, a money expert and business owner passionate about helping you take control of your wallet. My mission with Up the Gains is to create a safe space to help improve your finances, cut your costs and make you feel good while doing it.
Quickfire Roundup:
When a mortgage offer has been issued, you need to accept it and show your lender that you want to move forward.
A mortgage offer will usually expire within 3 to 6 months depending on the lender, so you need to be on the ball and move things forward if you want to proceed.
To prevent any issues, and to keep the mortgage process moving, be sure that you’re upfront with your mortgage lender if your personal circumstances change.
Once you’ve found the perfect property, used the services of a mortgage broker and received a mortgage offer, you certainly have cause to celebrate.
You’re that much closer to completing your property purchase, but do you know what happens next?
As you read on, I’ll be showing you just what happens after mortgage offer. You’ll be left knowing just what you need to do, as well as the role of other parties.
Match with a mortgage advisor that suits your unique financial goals, and when you do, Unbiased donates to the Samaritans.
Table of Contents
Understanding what happens after mortgage offer
When a mortgage offer is issued, there are various steps that you need to take:
Check the details of the mortgage offer
Before you rush ahead and accept the mortgage offer, you need to take some time to review the details.
You should be looking at the mortgage term, is the mortgage fixed, the interest rates, the monthly mortgage repayments and any fees that may apply, including early redemption charges.
These details should be clear to you from your mortgage application, but you should double-check everything.
Mortgage offers will rarely contain any surprises, but it’s best to be sure.
Accept the mortgage offer
If the offer is all good, and as expected, you need to let the mortgage lender know that you want to move forward.
Your mortgage broker or solicitor will be able to advise on how to do this, but generally, it’s as simple as signing a form and returning it.
If there are special conditions attached to your mortgage offer, a conveyancing solicitor will explain these to you.
You’ll usually then need to sign a memorandum of understanding to show the mortgage provider that you accept the conditions.
If a mortgage offer expires, you run the risk of jumping through various hoops again. This means that you should accept the offer as soon as possible if you’re happy with it.
Complete the whole property sale process
When you receive your mortgage offer, it’s then over to your conveyancing solicitor to complete the legal aspects of the property purchase. One of the first steps will be to agree on a date to exchange contracts.
At this point, you are legally obliged to complete the purchase. Of course, being legally committed should be seen as a positive, as you’re one step closer to owning your own home and getting on the property ladder.
From mortgage application to exchanging contracts should take around two months. This can vary though depending on how quickly your solicitor can move.
What even is a formal mortgage offer?
Mortgage lenders send you a formal mortgage offer to show that they have officially accepted your application.
This means that the lender has considered your mortgage application, carried out a credit check, reviewed your bank statements, deposit money and confirmed your employment status. With all of this information, the lender is happy to go ahead and offer a mortgage deal.
The mortgage offer should be posted out to you, with a copy also going to your solicitor. Sharing it with the estate agent is a great move as it shows them that you’re serious and in a position to move forward.
The mortgage offer will show you:
- How much you can borrow for the house purchase
- The interest rate charged
- Conditions that apply. These could include things such as having to clear other debts such as a loan or credit card
Is my house purchase guaranteed after my mortgage offer?
When a mortgage offer is issued you’re not quite home and dry. The legal process still needs to be completed, and the lender needs to be happy that all is okay before the sale completes.
Here are things to be aware of:
Any change to your financial situation
The mortgage offer is made based on the financial circumstances that the lender knows about.
They have based it on your income or employment status, along with the property value, your affordability or credit check and a host of other factors.
Generally what happens after a mortgage offer is that most mortgage lenders won’t make any further checks.
However, you’re legally obliged to inform the lender of anything that has changed since you started the mortgage application process.
The best thing to do is sit tight and not make any changes until your mortgage offer leads to completion day.
Match with a mortgage advisor that suits your unique financial goals, and when you do, Unbiased donates to the Samaritans.
Any changes to the valuation survey or purchase price
Your mortgage offer will be made following a mortgage valuation survey. It will also be based on the purchase price and the loan to value.
If anything comes to light that changes the property valuation, you need to inform the lender and establish how it impacts an offer.
Moving smoothly from mortgage offer to completion
To keep things simple from mortgage offer to completion, you need to keep communication channels open. Most property purchases that complete without a hitch see regular communication taking place.
To get your mortgage deal across the line and complete the purchase, you need to:
- Keep your mortgage adviser up to date with any changes
- Chase for updates to ensure that any final checks are going smoothly
- Ensure that there is communication with the seller’s solicitor to keep things moving
- Focus on the property chain and ensure that the sale of your current property is moving as it should
- Be sure that estate agents are kept in the loop and be sure that they’re updating you too
There seems to be a great deal of waiting involved after you receive your mortgage offer, but you can keep things moving by keeping the communication going.
Can I get a mortgage offer extension if my offer expires?
The good news is that, if you keep your lender up to date, they’ll usually be happy to grant mortgage offer extensions.
When applying for a mortgage, most offers are valid for 3 to 6 months, but there is a level of understanding that delays can happen.
Lenders are used to mortgage offers expiring when it comes to lending for a new build property. These property purchases seem to take longer and lenders are more than understanding.
This is good to know when you have the right mortgage ready to go but is being held up by the works taking place.
The worst-case scenario is that your mortgage offer expires and you’ve not asked for an extension. In this case, you need to be back onto your mortgage broker and applying for a new mortgage.
FAQs
How long after a mortgage offer is completion?
After receiving a mortgage offer, the completion of the home buying process typically takes anywhere between 1 to 4 weeks.
This period can vary based on several factors such as the complexity of the property chain, legal work, and individual circumstances of the buyer and seller.
The completion date is usually set during the exchange of contracts and is agreed upon by both parties.
On the day of completion, the mortgage lender will release the funds to the seller, and the buyer will be able to move into the property.
Can a mortgage be declined after offer?
Yes, although it’s uncommon, a mortgage can be declined even after an offer has been made and accepted.
This could occur due to a variety of reasons such as a change in the buyer’s financial circumstances (like job loss, reduced income), adverse credit activity, or if the bank’s further evaluation of the property finds issues that were not initially apparent.
Additionally, if the lender discovers that the initial application contained inaccurate information, they may rescind the offer.
However, once contracts are exchanged, the process is legally binding and the likelihood of a mortgage offer being withdrawn is significantly reduced.
It’s always important to keep your lender informed of any changes in your financial situation and to provide accurate information on your application.
What are the steps after mortgage offer is accepted?
After your mortgage offer is accepted, there are several steps that need to be completed before you can finally call the property your own:
- Conveyancing: This involves the legal work to transfer the ownership of the property from the seller to you. Your solicitor or conveyancer will ensure all legal aspects are covered, including local searches, reviewing the contract, and arranging the date of completion.
- Exchange of Contracts: Once everything is in order, the contracts can be exchanged. At this point, the deal becomes legally binding. You’ll typically pay a deposit (often 10% of the purchase price) at this stage.
- Building Insurance: After the exchange of contracts, you’re legally obligated to the property. Therefore, it’s important to have buildings insurance in place to cover the structure of the property.
- Completion: This is the final step when the remaining money (usually 90%) is transferred from your solicitor to the seller’s solicitor’s account. Once received, you’ll get the keys – congratulations, you’re a homeowner!
- Post-Completion: After completion, your solicitor will register the transfer of ownership with the Land Registry. You’ll also have to pay any Stamp Duty Land Tax if it’s due.
Remember, while this is a general guide, exact steps can vary depending on your personal situation, location, and the type of property you’re buying.
How do you know if your mortgage has been approved?
After you apply for a mortgage, the lender will typically process your application and assess your financial situation.
If approved, the lender will send you a formal mortgage offer, either by post or digitally.
This document will detail the terms and conditions of the loan. It’s important to thoroughly review the offer before accepting it.
If there are any questions or issues, the lender’s underwriting department should be able to provide clarification. Always remember, until you receive this official mortgage offer, the loan approval isn’t finalised.
How long does it take from offer to exchange?
In the UK, the period from accepting an offer to exchanging contracts typically ranges from 4 to 6 weeks.
This timeframe can vary based on a number of factors, such as the length of the property chain, efficiency of solicitors, and any potential delays in paperwork or surveys.
Once contracts are exchanged, the agreement becomes legally binding.
Can a mortgage offer be withdrawn on completion day?
While it’s extremely rare, a mortgage lender can technically withdraw their offer up until the point of completion.
This would only typically occur if they discovered something significant that affects your ability to repay the mortgage, such as fraud, incorrect information on your application, or a major change in your financial circumstances (like job loss).
However, once contracts are exchanged, the process is legally binding and the likelihood of a mortgage offer being withdrawn is significantly reduced.
It’s always crucial to inform your lender immediately if there are any changes in your circumstances.
Final thoughts on what happens after mortgage offer
Moving from mortgage offer to completion can sometimes feel a little stressful.
When there seems to be plenty of waiting around, it’s easy to become impatient, or even worry that things aren’t progressing as they should be. The key here is to keep in touch with all parties.
A good mortgage adviser and solicitor will keep you in the loop, and up until the point of exchanging contracts and completion date, you need to be sure that you’re communicating too.
This allows the process to progress smoothly with less chance of any hiccups.
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Disclaimer: Content on this page is for informational purposes and does not constitute financial advice. Always do your own research before making a financially related decision.
