What Happens After a Mortgage Offer? And Other FAQs

It’s a common misconception that you’re ready to complete your home purchase as soon as you’ve received your mortgage offer. While it’s true that getting your mortgage offer is an exciting part of the process and puts you a step closer to owning your new home, it does not mean that your conveyancer can complete your purchase for you straight away.  

This article from Consultant CILEX Lawyer Claire Gummow explores some of the most common questions about receiving your mortgage offer and what happens next in the conveyancing process. 

What is a Mortgage Agreement in Principle? 

If you’re buying your property with a mortgage, the first step is getting an agreement in principle from the mortgage lender. This provides information about how much a mortgage lender will potentially agree to lend you.  

You will usually need a mortgage agreement in principle before you start looking for properties to buy, so you know what you can afford. 

What is a Mortgage Offer? 

A mortgage offer is a formal document from a mortgage lender confirming that they are willing to lend you a specific amount of money to buy a particular property, as long as specific conditions are met. 

It outlines the key terms for the offer, such as: 

• The amount they are willing to lend 
• The interest rate 
• The mortgage term (the length of time you have to repay) 
• The monthly repayment amount 
• Fees associated with the mortgage, such as arrangement or valuation fees 
• Specific conditions that need to be met for the mortgage 
• The expiry date of the offer 

How Long is a Mortgage Offer Valid For? 

Mortgage offers typically only last for a set time. This timeline can vary depending on the lender and your circumstances, but it is usually between three and six months from the issue date. The exact expiry date will be detailed in the offer. this means that you must complete your purchase and get the mortgage before the expiry date.

It’s important to be aware of the date and plan your purchase accordingly, as it is usually not possible to extend the expiry date without providing new information to the lender. 

Is my mortgage offer final confirmation that I will get the mortgage? 

A mortgage offer indicates that the lender is initially happy to proceed with the mortgage, however it is not final confirmation that they will provide the funds.  

Mortgage offers are typically conditional, and lenders carry out further checks before releasing the funds. For example: 

• Final financial checks to ensure your circumstances haven’t significantly changed since issuing the offer. If your circumstances do change, such as losing your job or taking on new debt, they may withdraw the offer. 
• They may reconsider the offer if your conveyancer’s enquiries reveal anything that doesn’t meet the lender’s requirements. 
• Lenders also conduct checks to prevent fraud, so any concerns revealed in these checks could lead to the offer being withdrawn. 

Throughout the home buying process, you should keep your conveyancer informed of any changes in your circumstances and ensure you promptly deal with their requests for information to help minimise the chance of any issues happening. 

What happens when the mortgage offer is received? 

When your mortgage lender issues the mortgage offer, you will receive a copy, and your conveyancer will also receive a separate copy with the relevant legal pack.  

When purchasing a property with a mortgage, your conveyancer doesn’t just act for you, they also act for your mortgage lender. So, when the mortgage offer is received, your conveyancer will also look at your mortgage lender’s requirements and any conditions that are mentioned in the mortgage offer. They will use this information to establish whether the property and its title, the enquiries raised, replies received from the sellers, and the search results meet the mortgage lender’s requirements.  

If there are any concerns, your conveyancer will need to contact your mortgage lender and provide them with the details. You mortgage lender will then decide whether they are happy to proceed.  

The lender is happy to proceed: 

If they confirm with your conveyancer that they are happy to proceed, and you’re also happy, the matter can proceed to completion. Your conveyancer will advise you of any outcome received and discuss the next steps with you.  

The lender needs more information: 

Sometimes, your mortgage lender may require more information to make a decision. In this case, your conveyancer will relay this to you and discuss your next steps. 

Please be aware that all mortgage lenders have their own turnaround times, and this will need to be taken into consideration when dealing with them. 

When can the mortgage monies be requested? 

Your conveyancer will not be able to request your mortgage money until they are satisfied that everything meets your mortgage lender’s requirements. If there are concerns which have been referred to your mortgage lender, the monies can only be released when confirmation has been received that your mortgage lender is happy to proceed. A request for the mortgage funds indicates to the mortgage lender that the title to the property meets all their requirements. 

Therefore, whilst it is good news when your mortgage offer has been received it does not necessarily mean that you are then ready to proceed to completion. However please be assured that your conveyancer will be doing all that they can to carry out the necessary reviews, and they will always keep you updated and discuss the next steps with you at every stage.