Dealing with the complexities that mortgages bring can be tricky. There are many different things to think about, and questions to ask. So, it’s best to know some of the basics that can help it run as smoothly as possible. One of the questions you will probably ask is how long does a mortgage offer last?
The average time a mortgage offer lasts is between 3 to 6 months from the issue date. However, this can vary depending on the lender and the type of mortgage.
While it is possible to extend your mortgage offer after this period, you must inform whoever your lender is.
What kind of Mortgages are there?
There are many, many types of mortgages that span from purchasing a first home to business-related mortgages. Here are some of the most common;
- Repayment – The basis of the majority of loans.
- Interest-only – You only pay the interest back on the mortgage. Whilst this can seem like a good option, it can also sneak up as you are liable for the capital borrowed once the term ends.
- Fixed – A mortgage with a fixed interest rate for a certain amount of time; which can vary from up to two years to up to ten!
- Variable – Usually, this option refers to the lender’s standard rate on which the lender will base their products on. The interest rate is aligned with the Bank of England’s standard rate as well as their own which could lead to rising interest rates.
- Trackers – Trackers follow an interest rate that is at a set amount. These rates typically follow the base rate of the Bank of England. This enables the lender to determine if your mortgage goes up or down depending on if they up their interest rates or drop them.
- Capped rate – While difficult to find nowadays, a Capped rate allows your interest rate to stay at a fixed level, while you could also see it lower.
- First time buyer – This type of mortgage is tailored to first-time buyers trying to get on the property ladder.
- High percentile – This is designed to help buyers who perhaps don’t have the funding for a deposit for a property.
- Flexible – This mortgage option is often for buyers who are self-employed or have an unsteady income month to month.
- Cashback – Cashback mortgages work in a way that the borrower will gain a certain percentage back on the loan. As always, be aware of the interest rate.
- Buy to let – This option is for buyers who are looking to let/rent out the house after purchase, the details on this mortgage option will be different compared to other options.
How do I apply for a mortgage?
Whilst you are considering how long does a mortgage offer last, you first need to know how to apply for one. The process of applying for a mortgage may seem strenuous and long, and in some cases it is. Firstly, it is important to check your credit reports either through credit reference agencies or through a paid subscription (as well as the free online services).
As long as you are prepared with the essentials that will be highlighted on your application form and listed below, you will be on a good course.
- Your payslips from the past three months.
- Bank statements from your current account from the last three to six months.
- Your utility bills.
- Any proof of benefits you have received.
- A form of identity whether that be passport or driving license
- If you are self-employed, a statement of two to three years’ accounts from an accountant.
- A P60 form from your employer.
- SA302 tax return form only if you are self-employed or you have earnings from more than one source.
- Again, if you are self-employed, include information with their tax return that supports what the SA302 states about their income. I.e bank statement.
While these requirements may vary depending on your lender, it is important to have these just in case.
If you are looking into applying for a mortgage or just need some advice our independent mortgage advisers can help.
Get in touch with our friendly team here 01257 451673.