Mortgage Offer Withdrawn on the Day of Completion: What to do
What to do if your mortgage offer's been withdrawn on the day of completion or after exchange and how you could buy your home even after an offer withdrawal.
What to do when your mortgage offer is withdrawn on the day of completion
Following the recent interest rate rises, mortgage offer withdrawals on the day of completion are becoming more common. We know it’s extremely frustrating—when you’ve had a mortgage offer withdrawn, it feels like the dream of homeownership is slipping through your fingers.
But, you aren’t out of options. Here’s how you can get back on track; from what to next, to how you can buy your home when a mortgage doesn’t work.
Feel free to jump around.
- Find out why your offer’s been withdrawn
- Why would a lender withdraw a mortgage offer on the day of completion?
- What to do next
- Explore mortgage alternatives
- How to buy your home without a mortgage
Find out why your offer has been withdrawn
If your mortgage offer has been withdrawn on the day of completion, the first thing you should do is find out why it happened. The lender should’ve given you a reason when they notified you. But, if you’re still not sure why your offer has been withdrawn, you should get in touch with your lender as soon as possible. This will help you to work out what you should do next.
For example:
- If they’ve identified problems with the property, you may want to look for a different home. You wouldn’t want to buy a property if it’s a risky investment or unsafe to live in. As frustrating as it is, this could be a blessing in disguise.
- If your lender withdrew your mortgage offer due to the recent interest rate hikes, you may want to look for an alternative way to buy your home. The monthly payments outlined in your original mortgage offer will have increased significantly following the interest rate hikes. So, your lender could’ve withdrawn your offer because, with the new interest rates, they no longer believe you can afford to buy your home.
Why would a lender withdraw a mortgage offer on the day of completion?
Buying your first home is overwhelming at the best of times, never mind if you mortgage offer has been withdrawn this far through the process. If you’re still not entirely sure why your mortgage offer’s been withdrawn, here are a couple of common reasons:
The recent interest rate rise has affected your affordability
When you apply for a mortgage, the lender looks at your income and outgoings to check if you‘d be able to afford your monthly mortgage payments. Then, they offer you a mortgage based on how much you can afford at the time of your application.
Your offer may have been withdrawn if the recent interest rate increase happened after you were given your mortgage offer but before the day of completion. This is because the new interest rates will increase your monthly mortgage payments and the lender may not believe you can afford them anymore. They may see it as too risky offer you a mortgage for the price of the home you’re trying to buy.
Wayhome is a completely interest-free way to buy a home worth up to 10x your income. Skip ahead if you want to find out more.
Change in circumstances
Another reason your mortgage offer could be withdrawn after exchange or on the day of completion is that your circumstances have changed. Whether you’ve lost your job or significantly increased your outgoings; any changes that may stop you from being able to pay back your mortgage could result in your offer being withdrawn.
Suspicious activity
It’s classed as suspicious activity if anything you declared on your mortgage application turns out to be false. Anything that seems suspicious will be flagged and your mortgage offer will most likely be withdrawn. This shouldn’t happen if you keep your mortgage lender up to date with any changes to your circumstances.
Credit issues
Mortgage underwriters carry out extensive checks to make sure you can afford to take out a mortgage. This includes a hard credit check, which uncovers any missed payments or adverse history on your credit file. All of the necessary checks should be done before the exchange of contracts. But, mortgage lenders could run this check again after exchange or on the day of completion.
If they do run another hard credit check and find new adverse records on your credit file, your offer could be withdrawn. To avoid this, it’s important to disclose anything that might affect your credit score even if you’re sure it won’t affect your ability to buy the home.
What to do next
When you’ve had a mortgage offer withdrawn at this stage, it may be tempting to run straight to a new lender. However, you could end up in a worse position if you try to fast-track the process and push another mortgage offer over the line.
Having two mortgage offers declined in a short period of time could be extremely harmful to your credit file. So, though it’s easier said than done, the best thing you can do is take some time to consider your options.
Speak to a professional
You may want to speak to a professional to help you find the best way to move forward. If your mortgage has been withdrawn because you can’t afford to buy a home with the new interest rates, you may want to consider alternative ways to buy your home. Your local Citizens Advice Bureau will be able to tell you what buying schemes are available in your area.
If you still want to buy your home using a mortgage, you should speak to a mortgage adviser. They can help you assess your options and may be able to help you move forward.
Explore mortgage alternatives
If you’ve realised you can’t buy the home you actually want with a mortgage, don’t worry—you’re not alone. Unfortunately, the mortgage system doesn’t work for many first-time buyers.
That’s why so many people rely on mortgage alternatives, like:
Choosing the mortgage alternative that works for you depends on the type of home you’d like to buy and where you’d like to live. A couple of questions that could help you decide the best route to take are:
- Would you like a home with established value that’s for sale on the open market, or a new build home?
- Would you rather have more freedom about where you live, or choose from a selection of developments within certain areas?
With Shared Ownership and Help to Buy, you can only buy new build homes. These homes tend to be built in areas of regeneration, often located outside of established neighbourhoods and school catchment areas.
So, some people feel they’d have to majorly compromise to buy a new build. In fact, some people would rather stay renting than sacrifice their lifestyle just to get onto the property ladder.
If that sounds like you, Wayhome’s Gradual Homeownership might be the better option. With us, you aren’t forced to buy a new build. Instead you can buy the home you actually want worth up to 10x your income.
See how our customers, Rob and Aimee, bought their dream home with Wayhome.
How to buy a home without a mortgage
Gradual Homeownership is the new way to buy a home worth 10x your household income completely debt-free, with just a 5% deposit and no mortgage.
We’re able to do this because we don’t lend you any money. Instead, we work work out your home-buying budget based on what you can afford in rent, not what you can afford to borrow.
Since there’s no mortgage, there’s also no interest. It means you won’t have the rug pulled out from underneath you like you might with a mortgage lender.
And better yet, there’s also no risk of falling into negative equity if property values fall in the future.
You buy the part of the home you can afford today, then gradually buy the rest over time with no additional fees.
We don’t believe people should have to compromise on the things that matter to them just to get on the property ladder. Whether that’s:
- moving away from the area you know and love
- buying a 2-bed flat instead of a 3-bed house
- missing out on that garden you’ve always dreamed of…
We believe buying your first home should feel like a step up, not a sacrifice. That’s why we created Gradual Homeownership—so that you can buy the home you actually want in the area you love.
