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Can my mortgage offer be withdrawn?
It is possible for your mortgage offer to be withdrawn by the mortgage lender.
There are many reasons why this could happen, this could be offer expiration, change in your financial circumstances, credit issues, suspicious activity or a problem with the property you are mortgaging.
Mortgage offers are not binding, and lenders do not have to honour them. A mortgage lender may withdraw their offer due to no fault of your own.
The lender may be having issues regarding their funding or their financial stability.
Full details regarding when and how a mortgage offer can be withdrawn will be within the terms and conditions of the offer you have received.
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Can my mortgage be declined after offer?
Yes, your mortgage can be declined after an offer has been made.
A few reasons why a mortgage may be declined post offer are:
Your financial circumstances change
A lender would decline and withdraw your offer if your financial circumstances change, and you are no longer able to afford the repayments.
This could happen if you lose your job or have a significant drop in income.
Adverse credit
Mortgage underwriters review your finances carefully at the underwriting stage before approving an offer.
If a lender discovers missed payments or bad credit post offer they are likely to decline as the original mortgage offer was provided without these in mind. to review you credit profile you can utilise either Experian, Equifax or Check My File, which offers a free trial.
Suspicious activity
If your lender suspects that any of the information you provided is fraudulent, they will most likely withdraw their offer to protect themselves from being complicit in any illegal activity.
Problem with the property
After offer the conveyancer will complete their conveyancing checks.
They may encounter issues that could reduce the value of the property you’re purchasing or potentially threaten the lender’s security.
Your mortgage lender may withdraw their offer, or they may change the terms of the agreement. If this is the case, make sure you’re happy to continue with the process in light of any new information, because there could well be long-term implications for you.
What checks do lenders do between offer and completion?
Generally, the mortgage lenders do not complete any further checks as these would have been carried out at the underwriting stage, pre offer.
Some lenders do complete a telephone call to the intended borrowers before completion to check their situation has not changed and that all facts previously presented to them are correct.
If the mortgage is to be extended the lender will complete a new credit check to ensure your circumstances have not change and may also require written confirmation from you verifying no change in your circumstances.
How long does a mortgage offer last for?
Mortgage offers typically last for six months. However, some lenders will only provide three months mortgage offers.
The length of the offer can often depend on when the date of the valuation was completed as lenders need to ensure that the valuation will be valid up until the end of the mortgage offer. Mortgage valuations are generally valid for six months.
How long does it take to go from offer to completion?
It generally takes around four to six weeks to go from offer to completion, depending on the smoothness of the transaction the speed of the conveyancing process and the size of the property chain.
A property chain is essentially when there is a group of people who are each buying and selling a property to someone else in the group, in a chain. The chain can have a minimum of two people in it, but there is no maximum number of people in the chain.
The mortgage lender will require notice, which the conveyancer will provide before completion, and this varies from two to five days depending on the lender.
Can you extend a mortgage offer?
Yes, it is possible for a mortgage offer to be extended. If you are concerned your house purchase won’t be completed within the time frame of the mortgage offer, contact your lender as they may be able to extend the offer for you. This will depend on your mortgage lender, but usually it can be extended a further three to six months.
The amount of time that you can extend your mortgage offer for would depend on the mortgage lenders criteria, your circumstances and validity of the current valuation.
Prior to the extension of the mortgage offer the mortgage lender will generally complete a credit search to ensure your financial situation has not changed.
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Can I get a loan after getting my offer?
It’s generally not a good idea to take on more debt after you’ve been approved for a mortgage.
Your mortgage lender may view a new personal loan as a threat to your ability to repay the agreed new mortgage and could lead to the lender withdrawing your mortgage offer.
What to do if your mortgage offer has been withdrawn?
The most important thing to do if your mortgage offer has been withdrawn is to communicate with your mortgage lender, asking why your offer was withdrawn and if there is anything you can do get it reinstated.
Secondly you should speak with an expert mortgage advisor to review your options and consider the most suitable lender to re-apply.
Conclusion
A mortgage offer is not binding and can be withdrawn by the lender for any number of reasons, and it is important to be aware of this before signing anything.
Some of the reasons your mortgage offer can be withdrawn could include if your financial circumstances change, if there is adverse credit, if there is a problem with the property or even no fault of your own.
The most important thing to do if your mortgage offer has been withdrawn is to communicate with your mortgage lender, asking why your offer was withdrawn and if there is anything you can do get it reinstated.
Secondly you should speak with an expert mortgage advisor to review your options and consider the most suitable lender to re-apply.
They are experienced, which can boost your chances of being approved.
