Sponsored feature | Rachel Sackel, Mortgage Advice Bureau
To make sure that you’re well on your way to securing your dream home, knowing exactly how long your mortgage offer is valid for is an absolute must.
Once you have accepted, your conveyancer can begin the final phases of the purchase, so it’s worth having an idea of the length of the offer in advance if you expect there might be delays.
What’s a mortgage offer?
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.
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Your mortgage offer will contain your personal details, property information, and the conditions of the mortgage. These include:
- Interest rate
- Length of the mortgage initial term (for example two, five, or 10 years)
- Repayment amount and type
- Whether you’re able to overpay
- Any mortgage fees that require payment
- 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- and 40 days for an application to be processed and an offer to be issued.
How long is a mortgage offer valid for?
Every mortgage is different, and the period that your offer is valid for varies from lender to lender. However, one thing that all mortgage offers have in common is that they last for a fixed period – in most cases, three months, but they can be valid for up to six months. Some begin from the date of application, while others start from the date that the actual offer was generated. There are also some offers that outline a specific date that you must have completed on the sale of the property.
Whether you’re a first-time buyer or working through a remortgage, it’s really important that you check the individual terms and conditions and make sure you find out how long your mortgage offer is valid for before you sign on the dotted line.
How long do I have to consider my mortgage offer?
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Once your mortgage offer has been issued, you’ll have a seven-day reflection period to consider the terms and conditions. During this time, your conveyancer is unable to complete your mortgage without your approval. You’ll be able to cancel during the time, but be mindful that this may incur a fee.
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How long does a mortgage offer last if I’m buying a new build property?
Mortgage offer criteria tends to be slightly more complex for new builds, with six months serving as the standard mortgage offer period for new-builds bought off plan. However, as the mortgage offer for new-build properties can slightly differ, you may be able to apply for an extension. Advisers will be able to shop around for the right deal to suit your needs.
What happens if the 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, 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 prove tricky.
On the other hand, if your lender is unwilling to offer an extension, you will have to reapply for your mortgage all over again. This is because in the eyes of the lender, your financial circumstances may have changed during this period. As well as new credit checks and affordability assessments, this also brings with it a whole range of extra costs, such as solicitor’s fees or an additional valuation. If the property has increased in value over this time, you may have to find extra money, as your deposit sum will have increased.
As every mortgage and offer period is different, it’s easy to get bogged down in the finer details. Speak to our team and we’ll find the right mortgage for your circumstances and talk you through your mortgage offer step-by-step. Call 07375 886347 or visit our website at mortgageadvicebureau.com/cambridge.
Because we play by the book we want to tell you that your home may be repossessed if you do not keep up with repayments on your mortgage. There may be a fee for mortgage advice. The actual amount you pay will depend upon your circumstances, but a typical fee is up to 1 per cent of the amount borrowed.
