In this brief guide, we are going to answer the question “how long is it from a mortgage offer to exchange of contracts?”.

How long is it from a mortgage offer to exchange of contracts?

The average timeline from a mortgage offer to the exchange of contracts is 3 months but this is completely variable and based on the speed of the various parties involved such as the mortgage broker, the seller, the buyer, the mortgage lender, and the conveyancer.

What could affect the timeline between a mortgage offer and the exchange of contracts?

There are various things that could affect the timeline between a mortgage offer to the exchange of contracts but most of these things concern the various parties involved in the transaction.

We will therefore look at the various things which could increase the time between a mortgage offer to the exchange of contracts.

From the buyer

From the buyer’s point of view, there are various things that could definitely cause delays between the mortgage offer and the exchange of contracts which will be due to the buyer or the buyer could have had some control over.

These include:

Complex income

If you have a complex income then the mortgage lender may require you to produce more documents detailing the stability and validity of your income and this could take some time.

Bad credit

If you have bad credit then this could make completing your mortgage even harder as it is very likely the mortgage lender will want to manually underwrite your mortgage.

This means that you will be asked to produce various documents as evidence for income etc

There may also be various follow-up questions from the mortgage underwriter as they look to get a complete idea of your mortgage affordability.

Bad credit could include:

  • County court judgments
  • Bankruptcies
  • Debt relief order
  • Individual voluntary arrangements
  • Defaults

Lack of Complete Mortgage deposit

Mortgage lenders will usually carry out a proof of deposit check to ensure you have the mortgage funds but this is typically early on in the mortgage process.

At the point of the exchange of contracts, you may be required to then pay the mortgage deposit before the exchange of contracts and if for whatever reason you do not have the complete mortgage deposit then this could delay the timeline between the mortgage offer and the exchange of contracts.

Government scheme delay

Government schemes help you reduce the amount of mortgage deposit you may need to put down, reduce the price of the property or create a structure that increases your mortgage affordability much sooner than it would have been.

Some of these include first-time buyer government schemes whilst others in this list are accessible to you even if you are not a first-time buyer.

Government schemes are not available to you if you are getting a buy to let mortgage.

The Government schemes include:

  • Lifetime ISA– gives you a government bonus of £1,000 if you save the maximum £4,000 a year.
  • Help to buy ISA– gives a maximum bonus us £3,000 if you save the maximum allowed of £12,000. Before you get either you should consider which is better. Lifetime ISA vs Help to buy ISA.
  • Help to buy equity loan– gives you up to 40% as a 5-year interest-free equity loan. You begin to pay interest at 1.75 % after the fifth year and 1% plus RPI for every year thereafter.
  • Shared ownership– You can buy between 25% to 75% of the property initially with a shared ownership mortgage and then buy more using a staircasing mortgage.
  • Armed forces help to buy– similar to the help to buy equity loan but specific for the armed forces personnel giving them an increased chance of acceptance.
  • Rent to buy– This is the right to buy scheme on which this guide is currently discussing. A different marketing name is just used. Watch out for this when shopping to avoid missing out on eligible properties due to confusion.
  • Right to buy– allows you to buy your home at a discount price.
  • Preserved right to buy– same as above.
  • Right to acquire– similar to the above.

Depending on where you live, you may also be able to take advantage of home buying schemes provided by your local council. Example: In Norwich, the local councils provide the Norwich home options scheme.

The thing about government schemes is that they can take a while to process and getting the authority to exchange/proceed letter needed before you can exchange contracts when using a government scheme could potentially cause delays between the mortgage offer and exchange of contracts.

Communication delays

Communication delays can increase the timeline between a mortgage offer and the exchange of contracts. Buyers can sometimes become overwhelmed with the various tasks they have to carry out and end up taking to long to produce documents, reply to emails or return phone calls.

Fraud checks

Most mortgage lenders carry out final checks before they allow you to exchange contracts and weirdly enough these final checks seem to be the bottlenecks for most borrowers.

Fina checks could throw up CIFAS markers which will require the mortgage lender to investigate why the CIFAS marker was issued and determine if they want to go ahead with the mortgage application or withdraw the mortgage offer.

Expired Mortgage offer

Mortgage offers are usually valid for 3 months but if your mortgage offer expired then some mortgage lenders will insist on you reapplying for a new mortgage which will undoubtedly increase the timeline between your original mortgage offer and when the exchange of contracts happens.

From the seller

The timeline between the mortgage offer to the exchange of contracts is rarely influenced by the seller as just like the buyer, they both have an interest in wrapping things up swiftly.

There are however occasions where sellers are the root cause of delays in the timeline between a mortgage offer and the exchange of contracts.

They are:

Communication delays

Communication delays are one of the biggest reasons the mortgage offer to exchange of contracts timeline takes so long.

Communication delays could be as simple as returning a phone call, replying an email or even supplying requested documents.

Property chain

If the seller is also purchasing a property then the seller could be dependent on the other seller and if they move slowly then your property chain will move slowly.

There is unfortunately very little you or the seller could do about this.

The property is still on the market

In some cases, sellers will accept an offer on their house but still leave the property on the market in hopes of attracting better offers.

Sellers do this not just to get better offers but because in some cases, buyers pull out of the deal for a variety of reasons and the seller simply doesn’t want to be left with wasted time and no sale.

When a seller still lists the house on the market you will notice a lot of delays in the communication between yourself and the seller as they try and buy time with the hope of a better offer coming in.

In some cases, a seller will accept a higher offer and push you out of the deal. This is known as gazanging in the UK and has become more common as the years pass.

Agreed renovation on the property

If you and the seller reached an agreement for the seller to carry out some renovations before contracts were exchanged then these could possibly cause a delay and increase the timeline from the mortgage offer to the exchange of contracts.

From the mortgage broker

Communication delays

Picking the right mortgage broker is very important when getting a mortgage as the mortgage broker can sometimes play the biggest part in causing unnecessary delays.

The mortgage broker will usually be the main point of contact for all parties and this means if they are inefficient and are prone to causing delays, you could see the timeline between a mortgage offer and exchange of contracts increase significantly.

From the mortgage lender

Sometimes mortgage lenders will be the cause of delays from when a mortgage offer is issued to when the exchange of contracts is done.

Delays will usually come from one of the below things:

Property valuation checks

Property valuation checks can cause delays, especially if there is an issue such as damp, or Japanese knotweed to investigate further.

Manual underwriting

Mortgage underwriting could delay the timeline between a mortgage offer and the exchange of contracts.

Mortgage lenders could refer your mortgage application to a mortgage underwriter for a variety of reasons such as:

  • Bad credit
  • Complex income

From the conveyancer

The conveyancing part of the mortgage process can also take up a lot of time and this can be the case if there are issues found with the property that make it harder for the mortgage lender to confirm the mortgage application or issues which require further investigating.

From third party buyers or sellers

Delays from third-party buyers and sellers will be totally out of your hands. If you are selling a property before you buy one or buying a property before you sell one then you can naturally expect delays to occur with the increased number of parties involved.

As you can tell, the mortgage timeline between a mortgage offer to the exchange of contracts is dominated by a lot of communication amongst several parties doing several tasks.

Communication issues tend to cause the most delay and as the borrower, with the biggest thing at stake, you should do your very best to ensure you follow up with all parties and keep the communication chain open and flowing.

In this brief guide, we answered the question “how long is it from a mortgage offer to exchange of contracts?”.

If you have any questions or comments please let us know.

John has 22 years of experience in financial services. This spans across financial research, financial services (As a qualified mortgage broker and underwriter), financial trading and sales at global investment banks. While working as a publishing research analyst, he covered European bank credit and advised institutional clients on investment strategies at both JP Morgan and Societe Generale. John has passed all three levels of the CFA (Chartered Financial Analyst) programme.

John has 22 years of experience in financial services. This spans across financial research, financial services (As a qualified mortgage broker and underwriter), financial trading and sales at global investment banks. While working as a publishing research analyst, he covered European bank credit and advised institutional clients on investment strategies at both JP Morgan and Societe Generale. John has passed all three levels of the CFA (Chartered Financial Analyst) programme.