After you receive a mortgage offer from your chosen lender, the prospect of homeownership feels a bit more real. Next thing you know you’re picking up the keys and taking that long-awaited first step through the front door of your new property.
But unfortunately there are some circ*mstances in which a mortgage offer may be revoked by a lender. Although fairly rare, this can be understandably frustrating for would-be homeowners as it means you’re unable to continue with the process.
If you have concerns that your mortgage offer will be withdrawn, you’re in the right place. This guide covers the most common reasons this occurs, how to prevent it from happening, and what to do if you find yourself in this situation.
Can a mortgage offer be withdrawn by a lender?
Yes, a mortgage offer can be revoked by the provider at any time after it’s been issued. Make sure you thoroughly read all the information you receive with your mortgage offer, as there should be a section detailing the circ*mstances in which it may be withdrawn.
What would cause a mortgage offer to be withdrawn?
Mortgage offers are not withdrawn without reason; this usually occurs because the terms of the agreement have been broached, whether intentionally or by mistake.
Mortgage offer expiration
One of the most common reasons for having a mortgage offer withdrawn is because it has expired. Mortgage offers are only valid for a set period of time (typically 3 - 6 months), and if you fail to complete before the expiration date the lender has the right to withdraw.
The length of time your offer is valid should be made clear from the off, so if at any time during the process you suspect a holdup which could make it difficult to meet the deadline, speak to your mortgage provider or solicitor immediately.
Depending on the circ*mstances, lenders may be happy to offer you an extension - and you’re more likely to get one approved if you let them know with sufficient notice.
Change in circ*mstances
If the details you provided on your application are no longer correct due to a change in circ*mstances, such as a job loss or significant increase to your outgoings, the lender may decide to withdraw the mortgage offer. At the very least, they might adjust the terms of your offer to reflect your new affordability.
If your circ*mstances do change after receiving a mortgage offer and you find yourself in a situation where you feel you may struggle with the repayments, it’s always best to update the lender, regardless of whether or not they pick up on it or not. The last thing you want to do is enter into an unaffordable mortgage from the off.
Suspicious activity
If your lender detects anything suspicious surrounding your application, such as a declaration of information which turns out to be false, they will almost certainly withdraw their offer to safeguard themselves from becoming an accessory to fraudulent activity.
Credit issues
Before authorising an offer, mortgage underwriters will carry out an extensive review of your finances, including a ‘hard credit check’ to highlight any instances of adverse on your file. Sometimes, lenders will decide to run a secondary credit check after the offer has been authorised.
If your circ*mstances have changed and you haven’t informed them, your lender may decide to withdraw their offer. This is why it’s so important to declare any incidents that are likely to impact your credit file as soon as they occur, even if you’re confident they won’t impact your ability to afford your mortgage.
Problems with the property you’re buying
Sometimes, after a mortgage offer has been made, issues may arise that could impair the value of the property you’re buying or potentially compromise a lender’s security over the loan - such as contaminated land being identified during the conveyancing checks.
In this situation a mortgage provider might want to withdraw their offer, or instead they may decide to change the terms of the agreement. Make sure you’re happy to continue with the process in light of any new information, because there could well be long-term implications for you.
When in the process might my mortgage offer be revoked?
Lenders are within their rights to withdraw a mortgage offer at any time, up to and including when you exchange contracts, or even on the day of completion. The next steps to take will depend on where you are in the process.
Why would a mortgage offer be withdrawn after exchanging contracts?
Unless the mortgage offer expires in the period between exchange and completion, it’s fairly unusual to have it revoked at this time. But if any of the following come to light after you’ve exchanged contracts, a lender is still within their rights to withdraw:
Your circ*mstances have changed.
Errors on your application are identified.
- Suspicious activity is flagged.The lender changes their criteria.
A defect with the legal title comes to light.
While some of these circ*mstances are unavoidable, you can reduce your chances of disappointment by asking a mortgage broker for help with your paperwork before you begin, and duly keeping your lender informed of any changes throughout the process.
Why would a mortgage offer be withdrawn on the day of completion?
It’s very rare to have a mortgage offer revoked on the day you’re due to complete, as all relevant checks should have been carried out well in advance. But it has been known to happen, usually as a result of errors or red flags being identified during last minute checks ahead of completion.
Not only is it incredibly frustrating to have an offer withdrawn so late in the process, it can be expensive if you’re left to cover outstanding costs. If your offer is revoked due to a breach of terms, it is unlikely that you will be able to reclaim these costs.
If you receive notice that your mortgage offer has been withdrawn and the reasoning isn’t clear, be sure to contact your lender and request full details as to why they have made that decision.
What should you do if you’ve had a mortgage offer withdrawn?
If you’ve had a mortgage offer withdrawn, try not to make any rash decisions; rushing to hurry a subsequent application through could result in you falling at the same hurdle as before, or making more costly mistakes in the process.
Having multiple rejections in a short space of time may also be damaging to your credit file and future mortgage prospects - something which is definitely best avoided at this point of your home buying journey.
The first thing you should do is contact your lender to get a full understanding as to why your offer was withdrawn so the same mistake doesn’t happen in the future, and to find out if there is any way that the problem that caused them to withdraw their offer can be resolved.
It may transpire that your offer has just expired, or a simple typo on your application has prevented you from proceeding, in which case you may want to negotiate and reapply with your lender. If the circ*mstances mean that your existing mortgage provider is no longer suitable, seek assistance from a broker.
Our team of advisors know the industry like the backs of their hands, and after an initial consultation, will match you with the most competitive deals from lenders whose criteria your application is mostly likely to meet.
How a broker can help if you’ve had a mortgage offer withdrawn
No matter where you are in the house buying journey, having a mortgage offer withdrawn is always a disappointing, and often costly, experience. If you’re keen to avoid being stung twice, or simply hoping to make it through the process without complication, a broker is perfectly positioned to assist.
After taking the time to get to know you and understand your circ*mstances, our team will handpick only the most suitable products the market has to offer to reduce the chances of disappointment later down the line.
Once you begin the process, your broker will be at hand to guide you every step of the way. This includes helping you fill in all your paperwork, explaining any technicalities you don’t understand, and advising you on the next steps to take.
Before you commit, why not submit an enquiry or give us a call on 02380 980304? A member of our friendly team will be more than happy to have a chat, discuss your options, and explain what happens next if you want to proceed.
Mortgage offer withdrawal FAQs
The mortgage world is a complicated place, so we’ve done our best to provide the answers to the most common questions we get around having a mortgage offer revoked.
Can a mortgage be withdrawn after completion?
While it’s not possible to have a mortgage offer withdrawn after a sale has been completed, if you default on your mortgage payments or breach the terms of your agreement in any other way, your lender may decide to take legal action.
To avoid having your home repossessed, it’s important to communicate with your mortgage provider if you have a change in circ*mstances that could result in you struggling to keep up with your repayments.
If this is a short-term issue, there may be workaround solutions available such as a payment holiday or term extension - there are always options, and it’s best to flag any potential issues early for your best chance of working through them.
How likely is it to have a mortgage offer withdrawn?
Believe it or not, most mortgage providers won’t want to withdraw a mortgage offer - this action is usually only taken as a last resort.
Provided they receive enough notice as to any errors or change in circ*mstances, lenders usually prefer to explore alternative options, such as amending the terms of the deal or adjusting your borrowing limit.
Can a mortgage offer be withdrawn if I’ve been furloughed?
Yes, although this is very much situation dependent. If your lender has concerns regarding your job security or long-term ability to afford the proposed mortgage, they may opt to put things on hold until a later date.
Due to the large number of people that have been furloughed as a result of the pandemic, many mortgage providers have made changes to their lending criteria. If you’ve had an offer withdrawn, you can ask a broker to point you in the direction of lenders who have adopted a more flexible approach to furloughed customers.
Could my mortgage offer be withdrawn if I’ve been made redundant?
Yes, a significant change to your circ*mstances such as redundancy is likely to have a big impact on your finances, so a lender may decide to withdraw your offer if the mortgage is no longer deemed affordable.
If the redundancy doesn’t majorly impair your affordability, for example if you have another source of income or you’re applying for a joint mortgage with a partner, a lender may still give you the go ahead after a review of the terms to your mortgage offer.
Can I withdraw a mortgage application myself?
You can cancel your mortgage application at any point in the process up to completion, even if you’ve submitted all your paperwork. Bear in mind that any fees you’ve already paid are non-refundable, and you may incur some additional costs depending on where you are in the process.
Even if your chosen lender is happy to proceed with your application, if you have doubts or uncertainties surrounding the agreement or your ability to repay, it’s best to have a chat with your lender or seek advice from a broker before pulling the plug.
