Mortgage Offer Expires Before Completion: What You Need to Know

A mortgage offer is a significant milestone in the journey towards purchasing a new property. However, many homebuyers are unaware that these offers come with an expiration date. If you don't finalise your purchase by this date, your mortgage offer may become invalid, potentially leading to delays, additional costs, and even the loss of your dream home. 

In this insight, we will explore the various aspects of mortgage offer expiration, the reasons behind delays, and the steps you can take to prevent issues if your mortgage offer expires before completion.

Key Takeaways

• Mortgage offers do have expiry dates. In most cases, your mortgage adviser can refresh yours without complication.
• Delays to construction, conveyancing or completion can lead to your mortgage offer expiring.
• If you need an extension, simply contact your lender or mortgage adviser to discuss your options.
• Most Mortgage offers are valid for 3-6 months.

How Long Does a Mortgage Offer Last?

Most mortgage offers are valid for 3-6 months, although the exact duration depends on the specific lender. During this period, you should ideally complete the property purchase process, which includes property surveys and conveyancing. However, unforeseen circumstances and delays can occur, causing your mortgage offer to expire before completion.

Mortgage Offer vs. Mortgage in Principle

It's essential to differentiate between a mortgage offer and a mortgage in principle (MIP) also known as a Mortgage Promise. An MIP is a preliminary document you can obtain before finding a property to buy, indicating the amount a lender may be willing to lend based on your financial circumstances. This document is typically valid for 30-90 days and serves as a sign of your seriousness in purchasing a property. However, an MIP does not guarantee that a lender will approve your mortgage application.

Why Might a Mortgage Offer Expire Before Completion?

There are several reasons why your mortgage offer may expire before you complete the property purchase. Some of the most common reasons include:

Delays in New Build Construction

When purchasing a new build property, construction delays can cause your mortgage offer to expire before completion. These delays can result from labour or material shortages, poor planning, or adverse weather conditions. In such cases, lenders may offer more flexibility in their expiration policies, as they understand the potential setbacks in new-build properties.

Delays in the Conveyancing Process

The conveyancing process can sometimes take longer than expected, especially if your solicitor or the seller's solicitor is on holiday, or if there is poor communication between relevant parties. In such cases, you may need to request a mortgage offer extension to account for these delays.

Property Chain Issues

If you're part of a property chain, where multiple sales are linked, you can be at the mercy of other buyers and sellers, as well as their respective solicitors and estate agents. Delays in property chains can lead to your mortgage offer expiring before completion.

Can I Get a Mortgage Offer Extension?

Yes, most lenders are willing to provide mortgage offer extensions, given that they understand the various factors that can delay the property buying process. If you find yourself facing potential delays, it's crucial to contact your lender as soon as possible to discuss the possibility of an extension.

How Long Can I Extend My Mortgage Offer?

The duration of a mortgage offer extension varies depending on the lender and your specific circumstances. In general, you can expect an extension of at least one month. However, in some cases, lenders may agree to provide an extension of three months or more.

How to Request a Mortgage Offer Extension

If you need a mortgage offer extension, notify your lender as soon as possible. They will likely require proof of your current financial situation, including bank statements and payslips from the past six months, to ensure that your circumstances have not changed significantly since the initial mortgage offer.
 
It's essential to provide your lender with sufficient notice when requesting an extension, as they may need a few weeks to review your situation and make a decision. Be proactive in communicating with your lender, as timely communication can increase the likelihood of a successful extension.

What Could Prevent Me From Getting a Mortgage Offer Extension?

Lenders are not obligated to grant mortgage offer extensions and may reject your request for various reasons. Some potential reasons for denial include: 

• A change in your credit score
• A significant change in your financial circumstances, such as reduced income or increased debt
• Inability to provide the necessary documentation to support your request

If your mortgage declined before completion you may be eligible to apply for an override decision with the mortgage underwriters. Consider the reasons why your offer extension cannot be approved, collect evidence supporting your case, and request an appeal.

How to Minimise the Risk of Needing a Mortgage Offer Extension

Work With a Mortgage Adviser From the Start

Using a mortgage adviser from the start can help streamline the property buying process. Mortgage advisers can assist with your application, communicate with relevant parties, and ensure that you stay on track to complete your purchase before your mortgage offer expires.

Know Your Mortgage Offer Expiration Date

Make a note of your mortgage offer expiration date, so you're aware of the time frame in which you need to complete your property purchase. This knowledge can help you stay organised and proactive in addressing potential delays.

Keep Track of the Property Purchase Progress

Stay involved in the property buying process, monitoring the progress of construction and the conveyancing process. By maintaining open communication with your developer, solicitor, and lender, you can identify potential delays early and take action to prevent your mortgage offer from expiring before completion.

What Happens If I Can't Get a Mortgage Offer Extension?

If your lender refuses to extend your mortgage offer and it expires, you will need to reapply for a mortgage. This can involve additional costs, such as application fees, solicitor's fees, and valuation fees. You may need to apply for a larger mortgage or provide a larger deposit if the property value has increased.
 
In some cases, the expiration of your mortgage offer may present an opportunity to find a better mortgage product, as market conditions, interest rates, and housing prices can change over the course of several months.

Will I Be Able to Get Another Mortgage If My Last Offer Didn't Go Through?

A recent mortgage application on your credit report can be perceived as a red flag by potential new lenders, who may question why the mortgage was not finalised. While this scenario is less than ideal, many lenders understand that delays can occur, and with the help of a knowledgeable adviser, you can find a lender willing to approve you for a new mortgage.

Moving Forward: What to Do If Your Mortgage Offer Expires Before Completion

If you're concerned that your mortgage offer may expire before completing your property purchase, don't panic. There may still be time to request an extension or find an alternative solution. By working with a mortgage adviser and communicating openly with all parties involved, you can navigate this common challenge and secure the home of your dreams.

If you're unsure how to get started with seeking mortgage advice, complete the Sunny Fact Find. The answers you provide us help to find the best-suited adviser for your needs. Your adviser then contacts you to discuss how they can help. You decide how to proceed.