Mortgage offer validity
Each mortgage offer has a certain period of validity. This means that the mortgage must start within a certain period of time and you should have completed the transfer of the property at the notary. So, it makes sense to take into account the conditions concerning registering the so-called completion date, especially if it is further in the future. We’ll explain why.
Why the date of the key handover is important
Have you received your mortgage offer? If so, there are two dates that are important: the date that you sign the mortgage offer, and the date you sign the mortgage deed. Once signed, the offer is binding. That is why it is crucial to retain a sharp focus on the key handover date. Are you going to sign the mortgage deed within the term of the mortgage offer? If you have, then there’s nothing to worry about.
If you need to extend the validity of the offer
Extending the validity of the mortgage offer is not always possible. Therefore, see if you can extend it, and what any possible costs might be. The renewal fee and mortgage offer are also referred to as the commitment fee. Usually, you pay 0.25% of the mortgage sum every month. With a mortgage of
€ 400,000, this means € 1,000 per month. Good to know: these costs are tax-deductible.
Some lenders will allow you to extend the offer for your mortgage for free. It can therefore be advantageous to look for a lender who doesn’t charge extension costs. Our advisors can help you. Please note that you are often obliged to pay cancellation costs if you want to cancel the mortgage offer.
If you’re looking to cancel the mortgage offer
Usually, the cancellation costs are stated in the mortgage offer. If you don’t sign the mortgage deed at the notary within the term defined in the offer – including any possible extension – then you’ll often be required to pay 1% of the requested mortgage sum. If there is a risk that the purchase will fall through, or that the transfer will be later than planned, then make sure you pay close attention to the conditions for cancelling the signed mortgage offer.
Find out what else you should pay attention to in a mortgage offer
Which mortgage offer is valid for 6 months?
Every lender has their own validity period for the mortgage offer. By default, quotations are valid for 3 months from the start date of the application. Are you looking for a 6-month validity period? If so, there are still plenty of lenders to choose from, possibly with the aforementioned renewal costs. There are only a limited number of lenders who will offer a term beyond 6 months. The maximum term is 12 months.
Are you uncertain about the validity of the mortgage offer you’re applying for?
Providing advice about the validity period of mortgage offers is of course also part of our mortgage advisory service. Would you like to know what would be a sensible next step in your situation? And, are you curious about the validity of a lender’s mortgage offer? Our mortgage advisors will be happy to help you. Feel free to set up a no-obligation phone appointment.