During your mortgage application process, you will likely be aware of your mortgage offer expiry date, but do you know when your property valuation expires? Completions Manager, William Nolan-Mendez, explains why your property valuation expiry date is just as important as your mortgage offer expiry date.
What’s the difference between mortgage offer expiry and valuation expiry?
How long is a mortgage offer valid for? This is usually displayed prominently on your formal mortgage offer, the offer expiry is considered the absolute final deadline for completion and is typically valid for 3-6 months depending on the lender; however, this is not the only deadline you need to consider.
The valuation expiry date is set from the day that the property is valued and generally, most lenders valuations are valid for six months. As the mortgage valuation process is completed before the formal mortgage offer, it’s rare to find the two expiry dates coinciding.
When might the mortgage valuation expire before the mortgage offer?
In the more vanilla mortgage applications, with uncomplicated chains, it is unusual for the valuation to expire before the mortgage offer. However, if you have a case which requires complex underwriting, is in a long chain, or you have a problem where your chain breaks down, it is worth keeping an eye on your valuation date expiry.
Why do lender valuations expire?
As the property market fluctuates, so do property prices; this is why lenders will commonly set a limit of 90 days to six months on valuations. It ensures that the asset (the property) they’re securing the mortgage against has sufficient value to mitigate their risk.
What happens if my property valuation expires before I complete? Can you get an extension?
If your property valuation has expired, the lender will need to complete a new one, which you will likely be charged for, even if your mortgage product originally featured a free valuation (as many of them do now). Without a new valuation, you won’t be able to complete your mortgage offer.
In complex cases where it looks like the mortgage offer is likely to expire just before completion, lenders can sometimes grant extensions, allowing the case to complete smoothly.
How can we help?
Here at Mortgages for Business, we maintain a comprehensive record of lender offer and valuation expiry timescales. Your dedicated team of your broker and client relationship manager work together to use these reports to foresee and act upon potential issues before they become time-pressured problems for you.
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11th February 2020