Pay cut advised - Need mortgage - Do i tell?

BlahBlah

Hi all,

I am about to offer on a house, been approved for the Co-op Ownhome scheme (equity loan like MyChoiceHomebuy).

A few days ago i was told i would get a 10% pay cut at work, to take effect in 4 months time.

I would still easily afford the mortgage payments, but I am worried that if I tell the Co-op about the looming paycut that I would either get rejected from the scheme or put back in the waiting list.

So the question is, Do i tell the Co-op and potentially lose out? Or do I keep quiet about it and more than likely I will be able to complete the purchase before my payslips change?

Any advice would be appreciated.

Jaycee1972

I like to think I am an honest person but I think I would keep quiet! Only if sure you can complete before your pay changes and can afford the payments though (and I see you say yes to both these). Good luck

TEDDYRUKSPIN

This is fraud. What you are condoning is fraud. Have you considered that under the companies affordability criteria that they would consider the mortgage unaffordable? If it is unaffordable to them it would mean that you are at risk. If so, do you really believe that a rejection is done by spite?

Peelerfart

I just don't know how some people sleep at night ! :rolleyes:

steve237

Slightly difference scenario, but I have just called my existing lender to discuss options as I come to end of tracker deal and I was not asked about any changes to salaries when looking at a fixed deal. My wife has moved to a significantly lower paid job, but they didn't ask so I didn't tell them.

BlahBlah

Thanks for all the comments, I decided to do the honest thing and tell them. Better to be (possibly) rejected now than lose sleep about the possibility of being rejected just before completion. Or worse, be taken to court/jailed for fraud.

Luckily I was not rejected or put back.

opinions4u

steve237 wrote: »

Slightly difference scenario, but I have just called my existing lender to discuss options as I come to end of tracker deal and I was not asked about any changes to salaries when looking at a fixed deal. My wife has moved to a significantly lower paid job, but they didn't ask so I didn't tell them.

They have already lent you the money though.

Assessing your income now would be like shutting the stable door several years after Shergar bolted.

Would you expect your lender to say "oh, you earn less now. Please will you repay a few thousand to bring yourself back within our lending criteria"?

If you were raising additional funds or changing to a new lender you would almost certainly have been asked to confirm income.


OP Blah Blah:

I would still easily afford the mortgage payments, but I am worried that if I tell the Co-op about the looming paycut that I would either get rejected from the scheme or put back in the waiting list.

As you have already decided, honesty is the best policy. Especially as you feel that it is easily affordable.

So the question is, Do i tell the Co-op and potentially lose out? Or do I keep quiet about it and more than likely I will be able to complete the purchase before my payslips change?

Some lenders will also take up an income reference from your employer. If this showed that you had withheld relevant information there is a good chance they would decline you the mortgage even if you feel within their affordability criteria.

The only additional comment I'll make is that your employer is clearly under some sort of financial stress. A pay-cut was presumably offered as an alternative to redundancy. If their financial situation worsens, what do you think the next step might be?