How long do mortgage offers last?

The house buying process can feel daunting, especially to first time buyers. And one of the biggest aspects of buying a house is applying for a mortgage.

You need a formal mortgage offer in order to purchase your home, but how do you go about getting a mortgage offer?

In this article, we'll run through what a mortgage offer is, how you can apply for one, and when a mortgage offer expires. Let's dive in!

What is a mortgage offer?

A mortgage offer is the official confirmation that your mortgage application has been checked and approved.

You'll only get an offer after completing the mortgage application process, which means your lender has been given all the necessary information to prove your affordability status.

A formal mortgage offer will usually contain your personal details as well as conditions of the mortgage deal, and all the information about the property you want to purchase.

How do you get a mortgage offer?

You'll only get a mortgage offer once you've completed the mortgage application and met the lender's affordability criteria. This will include an investigation into your credit history as well as your financial circumstances like income and debts.

Lenders will also value the property to make sure the mortgage loan matches the value of the property. It also ensures the price you're paying for the property is aligned with the market average of that property type.

Follow these steps to get the mortgage offer in place:

Prepare your documents

Lenders need proof of identity and income to show you can afford the monthly repayments. Prepare your documents in advance, including up to six months of bank statements, to ensure you're ready to go whenever it's requested.

Mortgage in principle

Have you applied for a mortgage in principle? Your chosen lender can give you a written estimate of how much you can borrow. This can be really useful to show a home seller that you're a serious buyer.

Find the right mortgage

There are a tonne of different mortgage deals out there. Make sure to do your research or consult with a mortgage broker before committing to a de

Get a valuation

You'll need to get a valuation report to show lenders how much the property is worth, so they know that your purchase price is appropriate. This can assure the lender to go ahead with the loan.

Get a mortgage offer!

After that, you should be ready to get your offer! Most lenders will give you a mortgage offer within a few days of getting the valuation report (as long as they've got all the other details as well).

Can I get a mortgage offer without knowing what property I want to buy?

Long story short: no. It doesn't matter if you're a first time buyer or moving home for the second, third, or tenth time, you can't get a formal mortgage offer until you've found your chosen property.

The lender needs to check the value of the house they're lending against, and they can't do that if you can't provide them with the property. They'll also need to do a credit check as well as finance assessment.

No house = no offer!

That's why a mortgage in principle is so useful, as it gives you a springboard figure.

What happens after a mortgage offer is issued?

Accept or reject the offer

Once you've been given the offer, you can choose to accept or reject it. This can usually be done online.

Exchange contracts

Your solicitor will handle this part of the process. They will liaise with the seller's solicitor to agree a date to exchange contracts. This will be a legal commitment to buying the property; once you've exchanged contracts, you can't back out of the purchase without paying a compensation fee.

Complete the purchase!

Mortgage to completion could take anything from five working days to several months, depending on a number of different factors. But once everything is done and dusted, you're ready to complete the purchase!

How long does it take to complete after a mortgage offer?

The completion date usually arrives within one or two weeks of exchanging contracts with the seller, as most mortgage lenders require five working days to release the funds.

Your property purchase may also take longer if you're renting a property and can only give notice once you've exchanged. Delays can also occur if you don't have immediate access to the money you need to pay additional fees like Stamp Duty.

Or, if the seller's onward purchase falls through as part of the property chain, this could cause further delays.

How long does a mortgage offer last?

There's no exact time limit or duration a mortgage offer lasts; but most mortgage offers will last between three to six months, depending on the lender.

Different lenders will use different times as the start date of the offer; some will use the date you put an offer on the property, while others use the date of your mortgage application.

Some lenders may even choose a specific date by which you must have completed the property purchase.

Getting a mortgage offer extension

You might be able to extend your mortgage offer, but it's not always possible, especially if it's after the initial offer's expiry date. If you think you might need an offer extension, it's always better to let the mortgage provider know as soon as possible because they need a few weeks' notice to extend the offer.

Lenders will usually extend a mortgage offer for another month, but in extenuating circumstances (especially if they're out of your control), some lenders may be more flexible.

For example, if you're buying a new property, some building societies and other mortgage providers will offer an extension of up to six months if construction is delayed.

What happens if a mortgage offer expires?

If the mortgage lender refuses to extend and your offer passes its expiration date, the only option is to reapply for a mortgage with the same lender. This means you'll have to go through the mortgage process all over again, including checking your credit history, getting a new valuation, and other fees as part of the process.

It's good to seek advice from a mortgage adviser or mortgage broker who can keep you up to date on the progress of your property purchase, and warn you about any delays.

Can a mortgage offer be withdrawn?

Though it's rare, a mortgage offer can be withdrawn after it's been signed. If your financial situation has changed significantly (for example, if you lose your job or become too ill to work), or if the property drops in value, your lender may withdraw the offer.

It's quite rare for a mortgage lender to reassess your finances after making the final checks. But if you do have concerns about your mortgage offer being withdrawn, you could try to complete your purchase as soon as possible after exchanging contracts. That means you're less likely to be stuck in a contract to buy a house with no way of paying for it.

However, it's usually recommended to withdraw from the purchase before exchanging contracts if you have real concerns about personal circumstances that may change your financial stance.

What is a mortgage in principle?

A mortgage in principle (MIP) refers to a theoretical mortgage offer. An MIP will outline the amount you can borrow from a mortgage lender, so long as you meet the affordability criteria during the application process.

It's important to remember an MIP isn't an actual mortgage offer; it's a guide to help you in your house search to ensure you're looking at properties that match your affordability.

Read more about a mortgage in principle here.

It gives you a really good starting point to gauge the size of loan available to you, as well as the interest rate and term features. But they aren't set in stone.

It's also really useful when it comes to making an offer on the property you want to purchase, because it shows the seller that you're a serious buyer and you want the home buying process to go as quickly as possible.

Very often estate agents are reluctant to show properties to a buyer who doesn't have an MIP. It could be the make or break between you and competing buyers.

How long does a mortgage in principle last?

They'll usually last between 30 and 90 days to give home buyers time to find and have an offer accepted on their chosen property. But if you don't find a home within that time limit, you can re apply for an MIP after it expires.

Mortgage offer versus mortgage in principle

Be careful not to mix up MIPs with mortgage offers. MIPs are approved much more quickly and will last between 30 and 90 days, but they won't be accepted as a formal offer when it comes to buying a property.

Neither you nor the lender is tied to the mortgage in principle, so you can choose another deal when you do formally apply. This does however mean that the lender might not be able to offer that specific mortgage agreement if and when you apply.

You also don't need to provide as much detail when it comes to a mortgage in principle. In fact, you only need to give the lender very basic information and contact details. On the other hand, when it comes to a formal mortgage offer, you need to assess a wide range of documents from outgoings, income, other loans and financial circumstances, as well as a credit check.

Remortgaging

If you're planning to remortgage, you'll still need a mortgage offer from the new lender. It may take less time than the original lender. In some cases, you could get an offer within two weeks of making the application, but the lender will still need all the same information - it's essentially the same process.

Summary: A mortgage offer lasts up to six months!

So, a mortgage offer doesn't have an exact duration. For most applications, a mortgage offer expires within three to six months depending on the lender. You can get an extension in some circumstances, but if you miss the deadline, you'll have to reapply.

The main thing to remember is to have all the documents and information you need, so that when you do get your offer, everything is completely ready on your end.

If you're interested in how much a property is worth before making an offer, you can use our Online Valuation Tool today!