What to do when your mortgage offer expires between exchange and completion?

In this brief guide, we are going to discuss what to do when a mortgage offer expires between exchange and completion.

What to do when your mortgage offer expires between exchange and completion?

If your mortgage offer expires between exchange and completion then you should contact your mortgage lender to see if they will allow you to extend your mortgage offer in order for your to complete on your mortgage.

Most mortgage lenders will allow you to extend on your mortgage offer but you should try and do this in advance in case the mortgage lender you have a mortgage offer from does not allow you to extend the mortgage offer.

If the mortgage lender does not allow you to extend the mortgage offer then you may need to make a new mortgage application with the mortgage lender or another more suitable mortgage lender.

Most mortgage offers will be valid for 3 months but there are some mortgage lenders (especially new build mortgage lenders) who will give you a mortgage offer for as much as 6 months.

When can mortgage offers expire between exchange and completion?

A mortgage offer can expire between exchange and completion if you are taking a much longer time to process your mortgage application. 

This could be because conveyancing searches on the property are taking much longer or it could be because you are in a property chain and this is taking a significant amount of time to be resolved.

New build properties tend to have mortgage offers which expire as they are bought off-plan and in some cases, the new build developer may fail to meet their targets and hence the property isn’t completed in time.

No mortgage lender will let you complete a mortgage when the property isn’t habitable and hence the mortgage offer will expire.

Once this happens, you have no choice but to get a new mortgage offer.

How long can you get a mortgage offer extension offer?

The length you may be able to get a mortgage offer extension for will differ from one mortgage lender to another.

You should check with the mortgage lender in advance.

A mortgage lender may want to review your mortgage affordability before agreeing to extend your mortgage offer.

This could mean you have to submit the same documents which you initially submitted in order to get the mortgage offer.

These could include:

• Your last 3 months payslip
• Your last 3 months worth of bank statements

The mortgage lender will be checking to ensure there has been no significant change of circumstances since you got your original mortgage offer.

What if the mortgage lender does not extend your mortgage offer?

It may be the case that the mortgage lender refuses to extend your mortgage offer and you end up without a mortgage which is needed to complete on your home purchase.

In this case, your only option will be to apply for a new mortgage.

In any case, it is always worth reassessing your mortgage options before completing on a mortgage.

This is especially true when so much time has elapsed since you initially got the mortgage offer.

You may indeed be able to save money on mortgage interest repayments if you are eligible for a much cheaper mortgage.

The downside of having to apply for a new mortgage is that you will have to pay the same mortgage fees which you incurred when you made your initial mortgage application.  

These include:

Mortgage valuation fees

Mortgage booking fees

Mortgage arrangement fees

Mortgage fund transfer fees

Applying for a second mortgage offer within a short time does have some riks attached to it and it may be or likely that you get rejected.

This is due to the fact that the mortgage lender will see on your credit file that you had previously made other mortgage applications and may wonder why you didn’t proceed with the prior mortgage ender.

You should ensure you explain your case to the mortgage lender to increase your chances of getting a mortgage.

If your mortgage offer has expired between exchange and completion and you are thinking of getting a new mortgage offer then using a mortgage broker may be key.

Use a mortgage broker

You may want to consider using an independent mortgage broker to get a mortgage.

Mortgage brokers are important as they can access mortgage products from across the whole of the market in some cases.

This could be over 11,000 mortgage products. This may have some advantages rather than going directly to a mortgage lender.

A mortgage broker will look to understand your financial circumstances and then provide recommendations on which mortgage products may be suitable for you based on your mortgage affordability.

After giving you these mortgage recommendations, most mortgage brokers will seek your consent to apply for a mortgage in principle. 

This will allow you to shop for your home easier as more estate agents and sellers may take you seriously or it will give you confidence that your mortgage is indeed a possibility before you make a full mortgage application. 

Once you have found a home you want to buy and are satisfied with the mortgage offer for your mortgage then the mortgage broker will then look to get you a mortgage offer.

This will come with a key facts illustration document which details out the features of your mortgage including how much you will pay per month.

It will also contain information on if there are any limits such as early repayment fees, or annual overpayment limits.

If you are happy with everything you can then go on to secure your mortgage with the help of a conveyancer.

Your conveyancer will manage the legal searches on the property to ensure there aren’t any issues with it.

They will oversee the sales agreement to ensure it is in your best interest, they will manage the transfer of mortgage funds, exchange contracts with the seller or their conveyancer and set a completion date with the seller or their conveyancer.

In this brief guide, we discussed what to do when a mortgage offer expires between exchange and completion.

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

If you need financial advice and you live in the UK then you could contact the Money Advice service over the phone or via chat for impartial advice.

You can also contact the debt charity “Step Change” if you are in debt and need help.