"Possibility" of Redundancy, and Mortgage App.

LeafGreen

I'm an FTB who has been saving hard for 10+ years. Finally now I feel is the right time to buy my first place - I found a house that I really like and have made an offer.

A possible slight hiccup to this going through is that my employer has made a general announcement that they are looking to reduce headcount and does anybody want to be considered for voluntary redundancy. The implication being that if not enough people do so, then compulsory redundancies may be on the cards.

With all my savings I'm in a great position - house £190-195K, net savings almost £130K - I intend putting about £70k as deposit and keeping the remainder in savings (majority in a cash ISA, some shares, some instant access). Current salary around £35k gross pa.

So I'm comfortable that even if the worst did happen and I did get made redundant (payoff would be at least £20k) that I'd have a big safety net to continue making the payments/pay a lump sum off the mortgage until I found another job, and I could take a lower paid job if need be and still manage fine.

But is this "possibility" likely to affect my mortgage application? Do I even need to mention it to the lender? I've been through this process a few times before at work and still have a job!

Will the lender even check this detail with my employer?

Thankyou :-)

eh2nt

It's not normal practice for lenders to ask applicant's employers whether they are at risk for redundancy.

At this moment you are not under any redundancy notice so you do not need to disclose anything to any potential lender.

It's likely all the lender will need to see is that you have a good track record with your emploter and proof of income (payslips and matching bank statements). If both of these documents are fine then they are unlikely to investigate your employment any further.

Hoping that it doesn't happen but should you actually be advised that you are to be made redundant between application and completion of the purchase do you tell the lender?

Once the case has been offered there doesn't tend to be any further underwriting checks so you are unlikely to be caught out.

Clearly if you tell the lender (or even your solicitor - who may then be then obliged to tell your lender) then all the lender will do is pull the offer and you have lost your fees etc.

Given that you are leaving yourself a saftey net to allow you to cover your expenditure until you get a new job which is more than most people do as long as you continue to make your monthly repayments everything should be fine.

If you are considering taking redundancy insurance, your employers announcement might have different implications.

Thrugelmir

grahamgoo wrote: »

(payoff would be at least £20k)

Statutory redundancy pay isn't that good.

The_J

Thrugelmir wrote: »

Statutory redundancy pay isn't that good.

20k pay off would pay a mortgage that size for at least 5 years. That's what he is referring to.

OP, if it is confirmed that you will be made redundant while applying for the mortgage you must let the lender know and it will mean they won't advance you the money until you have a new role lined up.