Help on mortgage offer - stupidity involved

[Piddles1]

Sorry this is what I think a really stupid question.
we’ve sold our house and had an offer accepted on another one. We applied for a mortgage through a broker, they told us 2 days ago our offer had been accepted. Today we receive a document from Santander called ‘mortgage offer’. Does that mean they have done all the financial checks? The reason I ask is because it says in the small print they can retract the offer if our financial circumstances change, we’ve been really careful with money the last few months knowing we would be applying for a mortgage. So is it ok to not worry about that now, or could they do another financial check and this is a ‘pre offer’ or something?

Sounds like that is the actual offer. They always put in the small print about circumstances changing etc.

The mortgage offer comes through when they’ve completed their checks - affordability and credit checks for example. The pre-offer is called a decision in principle usually.

at least, that’s what I understand it to be and my own experiences. I always breathe a sigh of relief when the mortgage offer comes through.

The offer is your offer, made in the assumption that the information already provided remains an accurate representation of your finances. They may credit check you or ask to see bank statements and payslips again prior to completion, yes: it’s why you’re advised not to make any changes to your financial circumstances between offer and completion - but by “changes” they mean big purchases, additional regular commitments, taking out additional credit or loans, changing job, going on maternity leave etc: the big stuff, not minor shifts in everyday spending.

we had an AIP before and then did the formal application- this is what has come back but I don’t remember reading in the small print when we applied for our first mortgage that they could retract it. That’s whats making me question myself! Also massively relieved if it is the actual offer as I didn’t think we would get it 🤦‍♀️

The only thing I would advise is not to apply for credit cards or loans just in case the process takes longer than the mortgage offer is valid for. Our buyers did that and spent a fortune on furniture then panicked thinking that the extension wouldn’t go through. Their mortgage advisor didn’t think it was going to and caused a proper headache (thankfully it did go through).

Have you had a survey done? That can change the offer conditions.

That’s interesting you say that @Thestoppedfan as I wanted to apply for a balance transfer on one of my credit cards so will hold off. Was also wanting to buy a few bits so will hold off that too. Yes @Alphabet1spaghetti2 we had a valuation done by the bank but have also had a full structural survey done as well as it’s an older house

It is the mortgage offer however you should not apply for any form of credit between now and completion. Before they release the funds to your solicitor for exchange they carry out another check on your finances. Applying for credit at this point can mean they may pull your mortgage.

Do they @Aimee1987 ?! Will they have already done one on us, so as long as we don’t do anything crazy and nothing too drastic has changed we should be ok?

It depends how close to the edge you are. If you were only just about approved then 1 credit card application could be the final straw for the bank to pull the mortgage offer. I went with apply for no new credit for the months leading up to the application and right up to completion.

This blog chats through it.

www.onlinemoneyadvisor.co.uk/apply-for-a-mortgage/final-credit-check/

@Aimee1987 thank you, I’ve had a read through the link. I had no idea they did this so definitely won’t be applying for the balance transfer I was going to apply for! Thank you

That’s one less hurdle to jump!

@Alphabet1spaghetti2 oh I know! The whole thing has been more stressful than I thought it would be. Just getting an offer accepted was a battle 🙄

It is. Just try to keep in mind the end goal. It will be worth it. That is what I tell myself after every survey/solicitors email which produces another bump in the road. .at this rate I’ll be an alcoholic before moving day.

@Alphabet1spaghetti2 haha, oh yes I know that feeling. The longer it takes the more I worry our buyers will drop out and then we’ll lose our purchase. How long have you been waiting now? We only offered end of march so probably not as long as it feels, but every week the solicitors ask for something else

So far we are five weeks after offer accepted. But it’s taken two years to get this far. Now awaiting two further surveys (as a result of the first one) and apparently the solicitors searches are now not expected to come back until after 20th May. Our seller is pushing for things to hurry up.
Luckily we don’t need to sell.

And we instructed the solicitor the same day our offer was accepted. ☹️

@Alphabet1spaghetti2 oh wow it sound stressful. I find there’s so much pressure, trying to keep the buyer happy, trying to keep the vendor happy and move things along 🙄 out of interest what came back on your first survey that made you need 2 more?

Potentially needs a complete rewire of the property, and damp which might signify rotting sub floor, or could be damp due to lack of air vents plus missing springs in the subfloor. The latter being the cheapest of the damp options.
The electrics could be very old and an insurance problem or could just be that someone at some point, reused old fittings. Unlikely though given the fuse box is in the shower and no hard wired fire alarms etc.
TBF we had an idea the electrics were highly likely to need upgrading at some point. The damp is the icing on the cake ..

Oh dear, did you have an inkling it might be a fixer upper when you viewed? Have the bank said they need to clarify the damp and electrics before they’ll issue the mortgage? I’m guessing it’s a slightly older house? The one we are buying has come back with roof issues. No damp luckily (surprisingly) but needs other bits updating. I found the survey quite hard to decipher and understand to be honest

Fingers crossed it’s the latter less expensive option for you!

That's your mortgage offer OP! I received exactly the same from Santander once all stages in the application process were completed; congratulations!

@Starseeking thank you!! I still can’t quite believe it. Was sure that couldn’t be it, and we wouldn’t get it then bam it came through 🤣 I was so worried I even went to a mortgage broker as I have a late payment from a few years ago for a credit card so thought I would need an ‘adverse credit lender’ 🤦‍♀️

No idea. - had thought we could live with things for a year or two. It’s a 1900 build but recently renovated according to the blurb! As a result of the first survey our mortgage offer has been downgraded and the interest rate increased. The extra surveys we are having done for our own information, and possibly could lead to us renegotiating or pulling out.
The electrics we thought would just be a case of upgrading fittings and moving the fuse box to the other side of the wall into the kitchen. We’ve lived with battery smoke alarms perfectly fine for decades!

Did you speak to the surveyor? Ours was quite happy to explain things over the phone and gave us a lot of information on what to do/ask for next, as well as local info on flood risk etc.