You’ve applied for a mortgage and you’ve had an offer – great! But what happens next?
Applying for a mortgage can be an exciting step toward homeownership! Here's what to expect:
The process helps ensure you're matched with a mortgage that fits your financial situation perfectly. When lenders can see you're a responsible borrower and the property is appropriately valued, you’ll get a better deal.
The mortgage offer is usually sent to both you and your solicitor or conveyancer so you can review it carefully. It will confirm how much the lender is willing to let you borrow, the length of time you’ll make repayments for, and what these monthly repayments will be.
This is all based on the information the lender got from the valuation survey and the information you’ve provided them about your income and your spending. If anything has changed that could affect your mortgage offer – perhaps you’ve lost your job – you should tell the lender.
Plus, if there’s anything you’d like to change, you’ll also need to let the lender know now. For example, if you paid for your own property survey and it uncovered structural issues that mean you’ve now put in a lower offer, you’ll need to let the lender know so you can discuss this.
Unfortunately, it’s not unheard of for a mortgage valuation survey to flag up a serious issue with a property, e.g. structural problems or damp. When this happens, a lender may decide to lend you some of the money you need to borrow, but to hold back a portion of it until you have fixed the issue.
This is known as mortgage retention. It can cause real difficulties for buyers if you can’t afford to fix the issues using your own funds, and may even mean you have to walk away from the sale.
There may be a solution, though, like renegotiating with the seller.
If the mortgage offer meets your needs, the next stage is to set a date for completion. This is something that your solicitor will do in agreement with the solicitor working on behalf of the person selling the home you’re buying.
"Completion is a legally binding agreement"
Once you exchange contracts, you will need to pay the deposit on the property and you’ll take over responsibility for the buildings insurance.
You’ll then enter a legally binding agreement that you will go ahead with buying the property. If you changed your mind after exchanging, you could lose all your deposit money.
The last stage is completion. This can happen the same day as you exchange, but it usually takes between a week and a month.
On the day of completion, the lender will release the mortgage funds to your solicitor, who will send them to the seller’s solicitor. Then it’s time to collect your keys!
Once you receive your mortgage offer, this side of the property purchase should run smoothly. However, the rest of the sale may not be so plain sailing.
If the purchase drags on, perhaps because the seller hasn’t found somewhere to buy, there’s a risk your mortgage offer could expire. They don’t last forever (typically 3 to 6 months) and nor do the mortgage products lenders provide.
So if you’re yet to exchange and know your mortgage offer is nearing its expiration date, contact your lender as soon as possible and see if you can extend it. This is often possible, but if it’s not, you will need to start the application process again.
Read our tips on how to extend your mortgage offer.
Disclaimer: We make every effort to ensure content is correct when published. Information on this website doesn't constitute financial advice, and we aren't responsible for the content of any external sites.
Zubin is a personal finance writer with an extensive background in the finance sector, working across management and operational roles. He applies his experience in customer communication to his writing, with the aim of simplifying content to help people better understand their finances.
Sign up for tips on how to improve your credit score, offers and deals to help you save money, exclusive competitions and exciting products!
