What Is a Mortgage Offer?

Whether you’re on your first step to securing your perfect mortgage or you’ve completed all the initial checks and are now wondering  “what happens next?”. Understanding what a mortgage offer is and why it matters is key to completing your homebuying process.

So, “What is a Mortgage Offer?”

A mortgage offer is a formal agreement from a lender that confirms the specific amount that they’re willing to lend you and will outline all the key details of your mortgage product.

In this article, we take a deep dive into everything you need to know about mortgage offers, from the steps to secure a mortgage offer to how long the process will take. Let’s jump in.

Steps to Getting a Mortgage Offer

As the word suggests, a Mortgage Offer is a formal offer, proposed by your chosen lender, that will state the exact amount of money they agree to lend. In addition, this document will also detail all the important terms, including the loan sum, interest rate, repayment schedule, and any conditions that need to be fulfilled before the mortgage can be completed.

Receiving a Mortgage offer is the final step before you are able to enter the final stages of your property purchase, including the exchange of contracts and transfer of ownership.

But let’s start from the beginning.

Here are the steps you need to take in order to secure a mortgage offer:

1) Contact a Trusted Mortgage Broker

Working with a trusted whole-of-market mortgage broker is by far the smartest first step when looking into securing a mortgage offer.

But why?

In short: A mortgage broker will simplify all the steps leading up to achieving a mortgage offer and will essentially streamline the entire process.

From guiding you through each stage, preparing documents, checking your credit score, and submitting your application in a professional format, a mortgage broker can save you heaps of time and stress.

Additionally, trusted mortgage brokers will provide tailored advice that can ensure you avoid the common pitfalls of mortgage applications, increasing your chances of securing a competitive mortgage offer quickly and efficiently.

Unlike dealing with lenders directly, a whole-of-market broker has access to a wide range of mortgage products from across the market. This can help you find and compare products in order to find the best deal tailored to your needs.

At Boon Brokers, we offer fee-free advice, providing impartial guidance that focuses on finding the right mortgage for you.

2) Prepare Your Documents

While it may sound simple, getting your paperwork in order can be the difference between a successful mortgage application and your mortgage application being rejected.

Lenders rely on clear and up‑to‑date documentation in order to complete their assessment of your affordability, financial profile, and identity.

It is one of the most common pitfalls for mortgage applications, but by simply not having all the relevant paperwork up-to-date and ready at hand, you can end up running into delays.

As such, being organised here can not only improve your chances of success, but can inevitably speed up the process significantly.

Typically, your lender will ask for the following:

• Proof of ID: This can be a valid passport or driving licence
• Proof of address: A recent utility bill, council tax statement, or bank statement
• Proof of income: Depending on your employment status, this could be three months’ payslips or, if self‑employed, SA302 forms and HMRC Tax Year Overviews from the past two to three years
• Bank statements: Latest bank statements that cover your main accounts for the last 3 – 6 months
• P60: Providing your P60 will allow lenders to evaluate your total year’s earnings and tax paid
• Proof of deposit: This proof can be in the form of a savings statement or a gifted deposit letter

It’s important to note that if you’re self-employed or a contractor, you may also be asked for your business accounts, accountant’s reference letter, and evidence of ongoing contracts.

It is best practice to double‑check with your dedicated broker or chosen lender for any specific requirements to ensure that you include all documentation that is required.

Once your documents are ready, the next step should be to obtain a Mortgage in Principle. This document can provide you with an early indication of your borrowing potential, helping you narrow your property search to match your borrowing power.

3) Mortgage in Principle

A Mortgage in Principle (MIP) – also commonly known as an Agreement in Principle or Decision in Principle – is a lender’s initial estimate, based on a preliminary affordability assessment, of how much they are likely to be willing to lend you.

There are two main advantages of receiving an MIP, including:

• This document can be used to show estate agents and sellers that you’re a serious buyer.
• An MIP provides you with clear insight into your borrowing power, enabling you to focus your house‑hunting for properties that match your borrowing power.

It is important to note, however, that a MIP is not a legally binding contract and should only be used as an indication on your borrowing power.

There are still many reasons why an MIP can be withdrawn by your lender at a later date. For example, should a further in-depth review of your finances uncover lots of debt, fluctuating income, or a change in circumstances, lender’s retain the right to withdraw their preliminary MIP offer.

4) Check Your Credit Score

Along with your income, expenditure, and deposit, your credit score is also one of the “usual suspects” that lenders will typically assess.

A strong credit score can improve your chances of not only receiving a mortgage offer, but also receiving an offer with more competitive interest rates. On the other hand, a lower credit score may lead to higher interest rates and in some circumstances, limit your lender options.

As such, before you apply for your mortgage application, it is always best practice to check your credit score with trusted agencies such as Experian, Equifax, or TransUnion. Alternatively, you can use CheckMyFile for a more in-depth analysis of your credit standing.

Should you discover that your credit score is not quite where you’d like it to be, it can sometimes be worth taking the time to improve this. Paying down existing debts, making payments on time, and avoiding new debts, can all improve your credit score before your mortgage application.

5) Find the Right Mortgage

With thousands of mortgage products on the market, choosing the right mortgage can sometimes feel like a long and drawn out progress.

Fixed rates, tracker rates, discounted deals, along with a host of other jargon, all featuring both pros and cons can leave you feeling like you’re taking 1 step forward and 2 steps back.

But don’t worry – we’re here to help.

As we noted in step 1, working with a trusted whole-of-market mortgage broker – like Boon Brokers –  can help you find the mortgage that’s right for you. By comparing deals from over 90+ leading lenders, we can match you to the mortgage product that best suits your needs

After you discuss your requirements and choose your preferred lender and mortgage product, your chosen lender will then arrange for a property valuation.

6) Receive a Valuation Report

You’ve found the mortgage that matches your needs and your application has been submitted. Next up, your chosen lender will arrange for a property valuation in order to confirm that the property you’re purchasing is worth the amount of money you have requested to borrow.

As mentioned, this is usually organised by the lender. However, in some cases, you will be required to provide a detailed valuation report of the property, evaluating any defects that could affect its overall value.

Valuations can vary, from a basic mortgage valuation to a full property survey, and the type of valuation you require will usually be related to the property type.

In the events that the property valuation uncovers defects that lower the expected value, then your mortgage offer may be reduced or withdrawn. As such, it’s crucial to appoint a reputable, RICS‑registered surveyor if you opt for a detailed survey.

7) Receiving a Mortgage Offer

After all lender checks have been completed,  including underwriting, affordability assessments, and the valuation, providing that the lender is happy with everything, you will be issued a formal mortgage offer.

Unlike a MIP, a mortgage offer is a legally binding document (subject to its stated conditions), and will included details on the following:

• The loan amount
• Interest rate and type (fixed, variable, tracker)
• Term length and repayment schedule
• Any conditions such as requiring buildings insurance or specific property repairs

How Long Does It Take to Get a Mortgage Offer?

The answer to “how long does it take to receive a mortgage offer?” will directly depend on what stage of your mortgage journey you’re currently at.

From start to finish, on average, it can take anywhere between 2 to 6 weeks, though this timeline can vary depending on your specific circumstances. For example:

• How quickly you supply required documents
• The complexity of your financial situation
• The turnaround time for the property valuation
• Your lender’s internal processing times

All of these factors will influence the timeline of receiving a mortgage offer. As such, it’s important to avoid unnecessary delays and ensure your paperwork is complete and up-to-date to help speed along the process.

Working with a trusted mortgage lender can also drastically improve the time it takes to receive a mortgage offer. This is because they can help streamline the entire process, from providing documentation to chasing up the progress of your application on your behalf.

Difference Between a Mortgage Offer and a Mortgage in Principle

The main difference between an official mortgage offer and a mortgage in principle is that while a mortgage offer is a legally binding agreement, an MIP is a preliminary non-binding estimate based on your initial affordability checks.

This importance is reflected in the stages that you will receive each of these documents.

For example, as outlined in the step-by-step process above, a MIP can be achieved very early on in your application process. This is due to the fact that its purpose is to provide you with an estimated insight into your potential borrowing power.

In contrast, a mortgage offer is the final, legally binding agreement and will only be offered should you meet all the in-depth assessments and criteria of that chosen lender.

In short: The MIP can help you begin and refine your property search; the mortgage offer is confirmation that you can borrow the specific amount that would enable you to exchange contracts and commit to the purchase.

How Long Does a Mortgage Offer Last?

If you’ve received your mortgage offer, then the next practical question to ask might be: “how long does a mortgage offer last?”

Most lenders in the UK set an expiry of 3 to 6 months, giving you time to complete any legal formalities and exchange contracts.

Along with your mortgage offer, there will be documentation that outlines the expiry and conditions of your mortgage agreement. Always check your offer’s expiry and, if necessary, request an extension well before the deadline.

Can I Extend My Mortgage Offer?

If your mortgage offer is approaching expiry, lenders will often allow extending the mortgage offer for a further period.

It is important to note, however, that you may be required to provide updated details to ensure that the lender is once again up-to-date on your latest financial standings. This could include providing recent payslips, bank statements, or completing a fresh property valuation.

If you think that it is likely that you will need to extend your mortgage offer – speak to your dedicated broker early. This can help avoid losing the initial mortgage offer and quicken the process of providing up-to-date proof of affordability.

Is a Mortgage Offer Legally Binding?

Yes, a mortgage offer is legally binding for the lender.

Once a lender confirms a mortgage offer, provided your circumstances and the property remain as stated, they are then legally bound to follow through with that contract.

That being said, it is not binding for you until contracts are exchanged.

Should for any reason you feel unsure or don’t wish to continue with your mortgage, then there is still time to change your mind or switch lenders before exchange, though you may incur fees if you’ve already paid for surveys or legal work.

Can Lenders Reject a Mortgage Offer?

Lenders can withdraw a mortgage offer before completion if your financial situation changes.

Should any further evaluation or check, completed by the lender, uncover reasons to believe you will not be able to reliably repay the set loan amount, then the lender holds the right to withdraw their mortgage offer. Common reasons include:

• A significant drop in income (e.g., job loss)
• Taking on additional debt (e.g., finance agreements)
• Discovery of fraud or misinformation
• A material change in the property’s condition

The good news – recent data from Trading Economics indicates a rise in mortgage approvals and lending activity across the UK, reflecting a more active market. However, despite an increase in offers, lenders still remain cautious and closely asses borrowers’ affordability throughout the process.

To reduce risk, it is best practice to avoid making major financial changes or applying for new credit while your application is in progress.

What Are the Next Steps After I Receive a Mortgage Offer?

After you have received your formal mortgage offer, then there are typically 3 steps left to complete before you become a proud property owner. These final steps include:

1. Accept or Reject the Offer

It is important that you review the terms of your mortgage carefully. If they meet your needs, formally accept the mortgage offer in writing.

2. Exchange Contracts

Your solicitor will exchange contracts with the seller’s solicitor. This legally binds both parties to complete the sale on an agreed date.

3. Complete the Purchase

On completion day, the lender transfers funds to your solicitor, who pays the seller. You then receive the keys and title deed to your new home.

If at any stage you feel unsure about the process or procedure, then consulting a trusted mortgage broker can provide you with a clear picture of how to move forward.

Speak to a Mortgage Broker

If you’re looking to secure a mortgage offer and don’t know where to start, it’s important to know that every mortgage and every buyer is unique.

We all have our own personal financial goals, situations, and plans for the future.

That’s why, at Boon Brokers, our expertise and fee‑free service ensure you receive impartial advice tailored to your circumstances.

We’re regulated by the FCA, and our years of experience help thousands of clients secure the right mortgage deal – from their first mortgage offer to remortgages and beyond.

Ready to secure your mortgage? Contact Boon Brokers today and speak to one of our mortgage specialists today for free guidance on your mortgage journey.