I know this headline sounds harsh, but recently I have had several clients ask, ‘now that my mortgage offer has been issued can I spend on credit cards or get a loan’ My advice is NO!
I would strongly recommend not spending on your credit cards or getting a loan until your mortgage has completed.
Whilst the lender has agreed your case and offered the loan to you, there are circumstances when the lender may make an amendment that could then highlight further credit commitments to when you originally started the application which could impact the affordability and reduce your loan.
The one that nobody knows it could affect your credit score (see my blog from a few weeks ago) – this is the scarier one as you can suddenly go from an Accept to a Decline.
Why would the lender need to check your case again once it’s been offered? here are a couple of examples:
· Change in Purchase Price - could reduce the loan amount required, which could change the product you are entitled to
· Lender has reduced their rate and you would like to switch
· Solicitor has confirmed the ground rent or service charge is higher (only applicable when buying a flat)
· Lender does a random audit and re-looks at the case (this is uncommon, but does occasionally happen)
I stress to all my clients please do not change any of your circumstances until your mortgage has completed!