Can a mortgage offer be withdrawn?
What Could Cause My Mortgage Offer to Be Withdrawn?
Receiving a mortgage offer is an exciting milestone on your journey to homeownership, but what if something goes wrong and your offer gets withdrawn? It’s crucial to understand the factors that could lead to this, so you’re fully prepared and know what to do if this happens. In this blog, we’ll explore the reasons a mortgage offer might be withdrawn and what you can do to prevent it.
Can a Mortgage Offer Be Withdrawn?
Yes, a mortgage offer can be withdrawn at any stage of the process, even after it has been issued. A mortgage offer is conditional, meaning it’s based on information provided to the lender at the time of the offer. If any of the conditions change or new information comes to light, the lender may choose to withdraw or amend the offer.
While it’s uncommon, it’s important to be aware of the potential risks and take steps to protect your offer throughout the process.
Offer Expired
One of the most common reasons a mortgage offer may be withdrawn is that the offer has expired. Mortgage offers are typically valid for 3-6 months, depending on the lender. If you don’t complete your application, proceed with the property purchase, or meet the lender’s conditions within that time frame, the offer can expire.
To avoid this, make sure to stay in close contact with your broker and lender. If you need more time, ask for an extension before the offer expires.
Credit Issues
Your credit score plays a critical role in securing a mortgage. If there are any significant changes to your credit score after receiving an offer, it can trigger further checks which may result in the lender reconsidering their decision. Issues like missed payments, increasing debt levels, or new credit applications could affect your creditworthiness, even after passing initial credit checks.
Criteria Not Met
Mortgage lenders have strict criteria for approving offers, including requirements related to income, employment status, property type, and debt-to-income ratio. If you fail to meet these criteria after receiving the offer, the lender may withdraw it. For example, if your income decreases, your job situation changes, or the property you are buying doesn’t meet the lender’s standards, the offer could be in jeopardy.
It’s important to be transparent with your lender about any changes in your circumstances during the mortgage application process. If something changes, speak to your broker as soon as possible to address any potential issues.
Subject to Valuation
Many mortgage offers are subject to a property valuation. This means that the lender will send a surveyor to assess the value of the property you’re buying. If the valuation comes back lower than expected or below the agreed purchase price, the lender may withdraw their offer, or they might reduce the amount they’re willing to lend.
To avoid this, ensure that you’re purchasing a property that’s in good condition and that its value is likely to meet the lender’s expectations. If there’s a discrepancy between the valuation and the offer, your broker can help you navigate the situation and find a solution.
Fraud or Misrepresentation
If the lender discovers any fraudulent activity or misrepresentation during the application process, such as incorrect information about your income, employment, or personal details, they can withdraw the offer immediately. This includes both intentional fraud and unintentional errors on your part.
Always ensure that the information you provide to the lender is accurate and truthful. If you’re unsure about any details, ask your broker for guidance to avoid mistakes that could jeopardize your mortgage offer.
What to Do If Your Offer is Withdrawn?
If your mortgage offer is withdrawn, it can feel like a setback, but it’s not the end of the road. Here’s what you can do:
Contact Your Broker: The first step is to reach out to your broker, who can help you understand why the offer was withdrawn and discuss your options. They may be able to negotiate with the lender or find a different mortgage provider.
Address Any Issues: If the withdrawal is due to credit issues, a change in circumstances, or unmet criteria, work to address those issues as quickly as possible. This might involve improving your credit score, updating your application, or providing additional documentation to the lender.
Consider a New Application: In some cases, it may be necessary to reapply for a mortgage. If your circumstances have changed, or you’ve found a new property, your broker can guide you through the process to find the best deal available.
Review the Valuation: If the issue is related to the property valuation, consider getting a second opinion or renegotiating the price with the seller. Sometimes a low valuation can be disputed or explained with additional information.
Stay Calm and Be Proactive: While it’s frustrating to have an offer withdrawn, staying calm and proactive is key. Keep the lines of communication open with your broker and lender, and be prepared to take action to resolve the situation.
Final Thoughts
While a mortgage offer being withdrawn can be worrying, it’s important to remember that it’s often due to specific factors, and there are ways to resolve the issue. By staying informed and working closely with your broker, you can mitigate risks and keep your home-buying journey on track.
If your mortgage offer has been withdrawn, or you’re looking for advice on how to secure a reliable mortgage, get in touch with us today. Our expert team at Need Financial Planning can guide you through the process, ensuring you have the support you need to make informed decisions and move forward with confidence.
