Mortgage Offer

Your mortgage offer is your most important document when taking a mortgage loan and will form the binding contract between yourself and the mortgage lender.

What is a mortgage offer?

A mortgage offer otherwise known as an 'offer of advance' is the formal document issued by a mortgage lender to a borrower that confirms that the lender is happy to advance them the money. The mortgage offer will only be issued once the lender is satisfied that the borrower is creditworthy and the property offers good security. Typically this means that:

• you as a borrower have the appropriate income level, and are able and capable of making the agreed contractual mortgage repayments
• your financial conduct history is acceptable and within their lending parameters
• that the property you wish to purchase (or remortgage) is adequate security for the loan

The mortgage offer will generally contain details such as your personal information (name, address, date of birth), the property information (address, property type, valuation, rebuild value) and the conditions of the mortgage such as interest rate, term, repayment amounts, repayment type, ability to overpay, mortgage fees payable and any early settlement charge amounts if applicable. It will also contain certain clauses stating their rights over the property should you be unable to repay the mortgage i.e. repossession and sale.

Once the mortgage offer is accepted, your solicitor will then be able to exchange contracts and complete the transaction. Your solicitor is not be able to exchange contracts before the mortgage offer has been issued and accepted.

Advice regarding mortgage offers

• The most important thing to do is to read the mortgage offer carefully. The offer will contain all the various caveats of the mortgage and it is therefore important that you know what you can and cannot do. If you do not agree with any of the conditions stated on the offer, you must speak to the lender beforehand as once accepted, it becomes a binding contract
• Once the mortgage offer is issued, it is highly unlikely that it will be withdrawn; however, there are some instances where a mortgage lender may decide to do so such as if the information on the application is found to be fraudulent

Summary

• A mortgage offer is the formal document issued by a mortgage lender to a borrower that confirms the lender is happy to provide the mortgage
• Once an offer is issued, it is highly unlikely that it will be withdrawn
• You must read the mortgage offer very carefully
• Your solicitor will not be able to exchange contracts without a mortgage offer

For more information about 'Mortgage Offers', you can call us on 020 8783 1337 or submit an online quote.