Remortgage with BIG potetial problem

sazandy25

Hi, I am after some advice, we are currently on a fixed deal with Accord Mortgages which ends in October. We have spoken to London & Country brokers who found us a 3 year fixed deal with ING Direct. We are in the process of getting the Mortgage offer (eg; house been valued, wage slips sent etc.) The payments will be less then we are paying now, even when we go onto the variable rate with Accord. The problem we have is that today I found out, I may be made Redundent. Do we have to tell ING Direct??? We would be able to cover the mortgage payments for upto 10 months from savings, without me working at all (which hopefully won't happen). I will not be fussy to keep a roof over our heads.

Seems silly for us to tell them and be worse off every month, I understand its risky but I KNOW the payments will be made every month, even if severe cutbacks need to made .

Any advice will be helpful

Thanks

_Andy_

Depends on the T&CS of your mortgage application and offer, check your documents.

erdd2

You say you MAY be made redundant. Was this from a reliable source, was it in writing?

sazandy25

yes reliable source, meeting at work with managers etc. The location where i work will be closing September. I may have chance of relocation but won't know until this Wednesday. Not looking likely but a slim chance. Just preparing for worse case.

holly_hobby

Oh what an absolute nightmare and horrid timing for you ... !!!

Assuming you are made redundant - to be whiter than white (and adhere to normal lender requirements), you should advise the lender of any material change to the info provided in your mge application.

How you proceed however is your choice (I won't give any moral argument), and I've given the official/professional stance that an adviser/broker should take if they became aware of any adverse change to an applicants status (pre completion). You should also be aware that lenders do perform random status checks right up to completion. (although of course your case may not be selected for a random audit at all, but then again it might !).

Taking my professional hat off, I would really strongly advise against going into any new liability knowing of any impending job loss, but you say that your outgoings will reduce under your new mge, and feel confident that affordability will be ok - which on paper it may, but household costs are on the increase, and I would urge you to proceed with extreme caution and carefully consider all financial aspects, and plan for worst case scenerios (as I would hate for you to struggle financially, and possibly have to later reconsider whether you really did do the right thing in moving at this present time).

One further thing I would say, is that any ASU or PPI you may effect in conjunction with the mge will be invalidated for your redundancy, as you were aware pre policy commencement, of your impending job loss. (stated just for you to be aware of this, if you are considering effecting such a policy for redundancy purposes).

Hope this helps (with best wishes that you may retain your position or for any future job search)

Holly

ruggedtoast

They are remortgaging, not buying a new house.

Assuming you arent actually given notice before the mortgage goes through, any employment checks the bank does will just confirm you are permanently employed.

The "risk" as it were is that if the bank decide that you withheld information that would have stopped them lending to you, they can technically call the loan back, leaving you repossessed without the normal forebearance that you would receive.

Presumably the probability of this happening if you are making payments ok is very low. I would imagine that as long as you make a decent number of payments they would probably still give you forebearance; although maybe someone more knowledgeable can tell us exactly what banks do when you tell them you're in difficulties.

For example, its not uncommon at all for couples to get a joint mortgage and then one person quits work to look after a child. If you're intending to do this, even if its two years in the future, technically you should the lender before signing on the dotted line, but who actually would?

I seem to remember having to say whether we were expecting any changes in the "near future" such as having more children or anything, although I am not sure how the bank intended to police that....

Thrugelmir

Consider remortgaging over a longer term. This would reduce monthly outgoings.

I'm only suggesting this as an interim step. Once the future becomes certain again. Increase\overpay on the mortgage to catch up the deferred payments.

HelpWhereIcan

Employment references do tend to ask whether the employee is under notice of redundancy and at least one lender I can think of also maintains details of which firms have formally announced consultation or redundancies and will send an employment reference to check on the back of that.

I would always advise that honesty is the best policy - the worst thing that can happen is for a lender to find out from someone else. The worst is always suspected then.

However, it is not the end of things. Accord do product transfers. This means that as an existing customer they will, subject to account history, transfer you to a new deal.

These do not require underwriting and generally take a phone call or simple form to set up. There can be issues if their automated valuation service undervalues the property but you can pay for a surveyor to go out if you think it is genuinely wrong. There is certainly far less paperwork and referencing than switching lender.

They compare favourably with remortgaging to a new lender e.g. a three year fixed at 4.04% with no fee may be a little more than 3.65% with ING but may be the right option for you considering your circumstances.

L&C probably will not receive a commission for advising on product transfers with Accord so you may have to investigate this yourself or with the help of a broker who charges a fee but looks at all options whether they pay commission or not.

The other thing to consider is the extent to which the application relies on your income. If it is aa joint application and one income will cover all or most of the amount needed you may find the lender will not have an issue that you are under consultation. Again somewhere professional advice can help.

Either way, it is the 'legitimate' solution to your issue and one I would urge you to look into.

holly_hobby

ruggedtoast wrote: »

They are remortgaging, not buying a new house.

Noted

ruggedtoast wrote: »

Assuming you arent actually given notice before the mortgage goes through, any employment checks the bank does will just confirm you are permanently employed.

The employer will disclose any impending redundancy if asked as part of employment checks/ref.

The OP has a duty under the mge app, to disclose of any known material changes that will affect their mge application. If they have it confirmed pre completion, that they are to be made redundant, this is a known fact to them. The suggested tack that they may get away with it, if the lender does not find this out from their own enqs - is really not advice I could or would give.

ruggedtoast wrote: »

The "risk" as it were is that if the bank decide that you withheld information that would have stopped them lending to you, they can technically call the loan back, leaving you repossessed without the normal forebearance that you would receive.

Non-disclosure - the lender has the right to recall the loan (i.e ask the OP to move the mge lending), which would only result in reposession if the OP was unable to source an alernative provider. (whether they would pursue this far if the mge is being satisfactorily maintained is doubtful)

The lender may put a note on the credit file/CIFAS record of the individual, detailing of suspected non-disclosure.

ruggedtoast wrote: »

Presumably the probability of this happening if you are making payments ok is very low. .

May be revealled if the OP is unable to source alternative employment, and seek repayment assistance from the lender (i.e payment holiday, redcued payments, change to I/O)

ruggedtoast wrote: »

I would imagine that as long as you make a decent number of payments they would probably still give you forebearance; although maybe someone more knowledgeable can tell us exactly what banks do when you tell them you're in difficulties.

• Possible agreement to (temporarily) change (all or part) to interest only, with the view to reducing monthly mge payment figure.
• If already on I/O may agree a term whereby the lender agrees to accept reduced monthly payment - with the arrears element rolled up onto the os mge debt (subject to current LTV and status)
• May seek a possession order following 3+mths arrears

ruggedtoast wrote: »

I seem to remember having to say whether we were expecting any changes in the "near future" such as having more children or anything, although I am not sure how the bank intended to police that....

Well it would naturally be difficult (as naturally unforseen events do occur), but what the lender is doing in asking for such data, is to give them leave to rely upon non-disclodure should they seek to terminate a mortgage. This would of course depend upon the events in question, and the basis of termination, upon which the lender is seeking to rely upon

H

jimjames

If it is only a possibility at the moment and no formal notice has been made then there seems little point notifying ING. The situation if and when formal notice is received may be different but at that point you may have already completed on the mortgage.

holly_hobby

Advice is given if the OP knows that they are definately being made redundant (which they will know by Wednesday, but which they seem to think is a forgone).

Obviously if they aren't being made redundant, or don't know if they are/haven't been formally served pre completion - doesn't take einstein to work out that officially, there is nothing to tell the lender so they could not be held guilty of non-disclosure in the future.

OP is seeking advice based on the fact they are going to lose their position, and how their current mge app should be handled on that basis.

H