In a nutshell, a mortgage offer serves as the official documentation issued to you by the lender confirming that your property has been valued, checked, and approved. This is issued once you’ve sent over all the required information regarding your financial circumstances and the property you wish to purchase, and the lender has assessed and ensured you have met all of the criteria for the mortgage.
Your mortgage offer will contain your personal details, property information, and the conditions of the mortgage.
These include:
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Interest rate
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Length of the mortgage initial term (for example two, five, or 10 years)
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Repayment amount and type
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Whether you’re able to overpay
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Any mortgage fees that require payment
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Early repayment charges
The amount of time it takes to get to the offer stage depends on how complex the application is. Generally, it tends to take anywhere between 18-40 days for an application to be processed and an offer to be issued1.
How long does a mortgage offer stay valid for?
All mortgage offers have one thing in common: they remain valid for a set amount of time (usually three months), although sometimes they’re active for six months. While some begin from the application date, others start from the day the offer actually went through. Additionally, some bids include the deadline by which the sale of the property must be finalised.
Regardless of whether you're a first time buyer or going through a remortgage, it's critical that you carefully review the terms and conditions of each offer and establish the duration of validity before signing on the dotted line.
When receiving a mortgage offer, you will be issued a seven-day ‘reflection’ period in which you can consider the terms and conditions of the offer. During this period, your conveyancer is prohibited from completing the mortgage without your prior approval. You can back out during this time, however, you may incur a fee.
What happens if your mortgage offer expires?
If you experience unexpected delays with your sale and it’s going to take longer to complete than there are days left in your mortgage offer deadline, you should contact your lender immediately. Depending on your circumstances and your lender, you may be able to apply for an extension. Banks and building societies may also give you an extension if you’re affected by events outside of your control. However, bear in mind that this may incur additional fees, and the process can sometimes prove to be tricky.
If you feel like you need to apply for an extension, it’s better to do this before the offer expires. If you apply after it has expired, it becomes a lot harder to have the extension approved. If you fail to have your extension application approved, you will have to go through the entire application process for getting a mortgage again. This may also involve repaying for a valuation, along with any other costs and fees associated with the mortgage application.
As every mortgage and offer period is different, it’s easy to get bogged down in the finer details. Speak to one of our advisers, who’ll find the right mortgage for your circumstances and talk you through your mortgage offer step-by-step.
References:
1: Yopa, 2022
Important information
Your home may be repossessed if you do not keep up repayments on your mortgage.
There may be a fee for mortgage advice. The actual amount you pay will depend on your circumstances. The fee is up to 1% but a typical fee is 0.3% of the amount borrowed.
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