What is a mortgage offer?
A mortgage offer is the official confirmation from a lender that they will give you a mortgage for the home that you wish to move into.
Without a mortgage offer, you can’t proceed with buying a home. Your offer will be confirmed once you have gone through the lender’s mortgage application process, including providing them with all the financial details they require to carry out affordability checks and a property survey.
How long does a mortgage offer last?
Most mortgage offers last between 3-6 months. However, the length of your mortgage offer will depend on your lender’s criteria.
It’s worth knowing the start date of an offer is the day it is issued by the lender, and expires on a specified date, detailed on the offer document
What is a Mortgage In Principle?
A Mortgage In Principle is not the same as a mortgage offer.
A Mortgage In Principle (MIP), or more commonly known as, Agreement In Principle (AIP), or Decision In Principle (DIP), is when a lender outlines how much they could be willing to lend you should you complete your application, and you are approved by the provider’s underwriters.
When you have this you can start looking for properties within your price range. A mortgage in principle acts as a seal of approval to show you’re a serious buyer and gives sellers confidence in your ability to afford their property.
How do I get a Mortgage In Principle (MIP)?
To get a mortgage in principle, you’ll need to provide basic personal information, including your income and how much you’re looking to borrow. The lender, if you meet their lending criteria, will provide you with a Mortgage In Principle.
Does a Mortgage In Principle guarantee I will be offered a mortgage?
No. A mortgage in principle is no guarantee that you will be offered a mortgage by a provider. Once you submit a full application you may be declined if they identify reasons why they should not make you a formal offer. This could be down to a number of reasons such as affordability, or information revealed during the credit check.
How long does a Mortgage In Principle last?
Typically a Mortgage In Principle will last between 60-and 90 days.
Often, when someone is looking to buy a home imminently, they will request a Mortgage In Principle. It’s important to only request a mortgage in principle when your intentions to buy a home are serious and you can act upon them within the required time frame.
When should I apply for a mortgage?
If you have identified a home you can see yourself living in that’s within your budget, and you have had your offer on it accepted, it’s time to apply for a mortgage.
What should I do if my mortgage offer has expired?
If the house-buying process takes longer than expected and your mortgage offer is becoming close to expiry, you could seek an extension from your mortgage provider.
As with many things in life it pays to be well prepared, and the earlier you inform your mortgage provider that you may need more time to complete on your property, the easier you will make it for all involved in obtaining you an extension.
Some providers may require a notice period of at least a few weeks, so if you have any doubt that you’ll need more time then contact your provider as soon as possible.
How to reapply for a mortgage
Sometimes circumstances mean you can’t complete on the property you want to move into before your mortgage offer expires. This can occur when you are in a lengthy chain if the seller changes their mind, or when delays in construction mean a new build property is not ready to move into in time.
Sadly, all you can do is reapply. You’ll need to follow the same process you did before. So, you’ll go through all the provider’s checks as before, they’ll carry out a financial affordability check on you, and comb through your credit file for any signs that your borrowing poses a risk.
Be aware that if you have to reapply, you will have to undergo another hard credit check which could impact your rating.
But, as long as your circumstances haven’t changed in the intervening period, such as a drastic change in your salary, or your credit score freefalling, you are likely to be accepted to the same mortgage you applied to previously with the same provider.
If your mortgage has been declined read our guide to find out what your next steps could be.
If you have been holding back from taking out a mortgage because you are worried that your mortgage offer will expire before you have found the right house, but you’ve now found your dream property, you can compare mortgages using a comparison tool.
If you are a first-time buyer you can compare first-time buyer mortgages from a comprehensive range of providers.