What to Do if You’ve Had a Mortgage Offer Withdrawn

No, mortgage offers are not being withdrawn due to rate rises. If this was even a possibility, the lender would have stressed it to you before offering you the mortgage.

If a lender withdraws your mortgage offer at any time – let alone on the day of completion - it can be very stressful. It's important that you act quickly to try and resolve the situation as soon as possible. Here are some steps you could take.

Find Out What Went Wrong

You can’t know what to do next if you don’t know what went wrong in the first place. Speak to your lender or mortgage broker about what happened to see if it can be prevented in the future. For example, if you’ve had a recent credit issue, you can then focus on working on improving your credit profile and avoiding taking out any new lines of credit when you reapply.

In England and Wales, you may back out of any purchase or sale up until the exchange of contracts without serious repercussions. After this point, however, all parties must abide by the terms laid forth in their signed contract. Otherwise, they can face legal action and financial penalties for breach of agreement.

If you choose to terminate a sale or purchase prematurely as either buyer or seller, it can be expensive. Losses can be incurred through the forfeiture of deposits and non-refundable services like conveyancing and surveys already carried out. So, take extra caution when making this choice.

If you're looking to buy or sell a home in Scotland, the process is slightly different. It's only possible to back out of an agreement prior to concluding the missives — a correspondence between solicitors representing both parties that comprises the contract for sale. Once those letters are sent, neither party can withdraw their offer any longer.

If a buyer decides to withdraw from a sale after the exchange of contracts is finalised, they could end up losing tens of thousands in their deposit. Additionally, the seller may be entitled to claim additional damages such as market depreciation if it results in a decrease in property value.

As a seller, if you withdraw after contracts have been exchanged, you may still be liable for paying your estate agent's fee. You may also need to pay your conveyancer, depending on your contract with them. Your buyers will also be eligible to recover their full deposit under these circumstances.

You're legally allowed to cancel your mortgage application any time before it reaches completion. But you may forfeit any charges that have already been made. It's important to talk with your lawyer and read the terms and conditions of your offer first. That way, you'll know what cancellation will mean for you in terms of costs and future options.

Withdrawing from a property chain late in the process can also negatively impact your future borrowing options, as lenders will see you as a less reliable potential borrower.

The mortgage process can be intimidating and confusing, but it's important to remember that there are options available even if you've had an offer withdrawn. With the guidance of a specialist mortgage broker, you'll be able to determine the best possible solution for your individual situation.

At John Charcol, we strive to provide the best advice and assistance so that you can take full advantage of the opportunities available when purchasing a property. Whatever the reason behind the withdrawal of your mortgage offer, we're here to ensure that you find a way to secure the home you want. Simply contact us today and one of our team will be happy to help. We look forward to helping you on your homebuying journey. ​