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Mortgage Advisor & Director
Is it possible that a mortgage offer could be withdrawn?
Unfortunately, yes, mortgage lenders typically reserve the right to withdraw their mortgage offer even after it's been issued.
This can happen any time before you complete your purchase, so it's a good idea to be aware of the circumstances before you break out the bubbly.
Why would a mortgage offer be withdrawn?
There are various reasons why a mortgage lender could withdraw their offer after approving your mortgage application. The most common reasons why mortgage lenders would withdraw a mortgage offer include:
A change in circumstances
Mortgage lenders could withdraw their offer if there has been a change in circumstances, for example, if you are made redundant or your outgoings increase significantly. In this instance, you will need to provide evidence of the changed circumstances and should ask your mortgage lender if their offer still stands.
Suspicious activity
If a mortgage lender suspects there is property fraud or suspicious activity in relation to the property purchase, they are likely to withdraw their offer on this basis.
Property issues
If the mortgage lender assesses the market value of the property and discovers that it is not worth what you paid or is valued below its purchase price, they could withdraw their offer.
Failing further credit checks
If during the mortgage underwriting process your mortgage lender discovers more serious issues on your credit file, or your credit score doesn't meet their requirements, they may withdraw their mortgage offer.
The mortgage offer expired
If the mortgage offer has expired, the mortgage lender is not obliged to honour it.
What to do if your mortgage offer is withdrawn
If your mortgage offer is withdrawn, you will need to discuss the situation with the lender. In some cases, the lender may be willing to re-issue a mortgage offer but this is not always guaranteed.
Depending on the reason for the withdrawal, you may also need to provide updated evidence of your circumstances. If you're struggling to secure a mortgage, our team can help.
How to avoid having your mortgage offer withdrawn
The best way to avoid having your mortgage offer withdrawn is to get proper financial advice and legal advice throughout the process.
You can achieve this by working with an experienced mortgage advisor who will be able to advise on the most appropriate mortgage provider based on your circumstances and their lending criteria and will keep the lender fully informed throughout the process.
It is critical that you are honest in your mortgage application. This includes any details on bad credit and financial circumstances. If a mortgage offer being withdrawn or rejected may impact your future mortgage prospects, so it is important that you work with a mortgage broker who will help boost your chances of approval. Mortgage brokers will be able to identify where you meet lender criteria and reduce your chances of being rejected.
What is a mortgage offer?
If you're looking at buying a property, you'll no doubt have come across the term 'mortgage offer'. Mortgage offers are an agreement from a mortgage lender to loan you a set amount of money, usually expressed as a percentage of the purchase price of the property.
The mortgage offer will state the interest rate that will be applied to the loan and also the length of time over which the loan will be repaid.
Tell me the difference between a mortgage offer and a mortgage in principle?
A mortgage in principle (sometimes known as a decision in principle) is the first step to getting approval on your new mortgage. You can get these very quickly (within minutes at Teito!) and they give an initial idea of what a lender is prepared to lend based on the information you've provided.
Once you've had an offer accepted on a property, your mortgage lender will then take steps to move the mortgage process along.
A mortgage offer is a final step in the process and it's when the lender agrees to actually lend you the money. This offer will be subject to survey and legal checks, of course, but it's effectively the green light to go ahead and buy your new home.
What happens after a mortgage offer is issued?
After your mortgage application has been approved and your mortgage offer is issued, your conveyancer can begin the last phase of buying your property.
This means they'll agree with the vendor's solicitor on a date to exchange contracts, which is the formal process of buying a property.
The exchange of contracts happens when each party - buyer and seller - hands over a copy of the contract to the other and legally commits to buying or selling the property. At this point, money is usually transferred from the buyer's solicitor to the seller's solicitor (though in some cases the money may be transferred at a later date).
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How long does a mortgage offer last?
When you've completed the mortgage application procedure and supplied your lender with all of the required information about your finances and the property you want to purchase if they are satisfied you be given a mortgage offer letter.
Your mortgage offer will usually stay valid for three to six months after you receive it.
Is a formal mortgage offer legally binding?
A mortgage offer is legally binding once the sale is completed, so it's critical that you understand the terms and conditions of the offer before accepting it.
If a mortgage lender has a reason to withdraw their offer, they can do at any time before completion.
So, a mortgage offer can be withdrawn at any time before you complete your purchase - even if you've already exchanged contracts on the property. This is something to be aware of if you're planning on celebrating prematurely!
How long does it take to complete after receiving a mortgage offer?
Typically, it takes around 1 to 3 months after you've been given an offer for your mortgage to be completed. Your mortgage broker will be able to give you a more accurate timeframe for this and offer tailored advice.
Could a mortgage offer be withdrawn on the day of completion?
It's highly uncommon for most mortgage lenders to withdraw mortgage offers on completion, however, if there is a change in circumstances or they suspect fraudulent activity, it could technically happen.
Could a mortgage offer be withdrawn after completion?
No, once you're property purchase is completed, the mortgage is finalised and the terms of your mortgage offer will come into force and you will be expected to start making mortgage payments.
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If your mortgage lender withdraws their offer and you need mortgage advice quickly, you'll be looking for an expert mortgage broker to assess the situation and work quickly to allow your house purchase to complete.
Get started today by comparing deals online and you could get another mortgage quickly.
Choosing an Adviser
Selecting a qualified and experienced mortgage adviser is of great importance. To choose a suitable adviser, evaluate their qualifications, experience, and reputation, and ensure they are regulated by the Financial Conduct Authority (FCA).
Read reviews from previous clients and make sure they provide a clear explanation of the products and services they offer, as well as the fees and charges associated with them.
Last updated 21 February 2024