Job is Threatened - Do I Have to Declare This Before Remortgaging?

mrobsessed

Hi All,

I've been working at my current job for 5 years but we have recently been told that our jobs are threatened and entered into a consultation period. This extended period will run until the end of April and there is still a chance a new job in the company will be offered before that date. Menwhile I want to remortgage as my current rate is high and I want to lower my expenses.

Do I have to mention the doubt over my job being secure to the new lender? Is it usual for a lender to write to my employer and ask if my job is guaranteed?

Even if I lose the job I know that the redundancy payment and the smallness of my mortgage will mean that it will be a few years before I'm struggling to pay, even without a new job, so I'm far from being concerned about repaying the loan, but I am worried about losing my current lender, being refused by the new one, and having to repay the entire loan. Am I just being paranoid?

Many thanks for your help
Mr O

kingstreet

mrobsessed wrote: »

I am worried about losing my current lender, being refused by the new one, and having to repay the entire loan. Am I just being paranoid?

Your current lender is stuck with you, for good or ill.

As you are aware of a possible change in your circumstances, changing lenders is not a good idea.

mrobsessed

kingstreet wrote: »

As you are aware of a possible change in your circumstances, changing lenders is not a good idea.

Could you explain why, please?

As far as I can see, I'm already paying the mortgage and will need to keep doing so, so why is saving some money (and making it more affordable) a bad thing?

I just need to know the risks of doing this. as I am well aware of the benefits as Ihave looked closely at the figures.

kingstreet

Why is it not a good idea, to remortgage to a new lender, in doing so suggesting your income and employment are perfectly safe and acceptable, when it's possible they aren't?

mrobsessed

Maybe I should rephrase my original question:

I'm not asking 'what would you do?', I'm asking 'what are the risks and pitfalls for doing what I've suggested?'.

Does anyone know or have an opinion on this?

Thanks.

Angry_Cat

Doesn't your current lender offer any lower rates ?

If you remortgage you will have to pay all the associated charges and fees, which could mean any saving with a different lender is in real terms reduced.

Instead of remortgaging, depending upon your lender you could just apply for a different rate, in my day this used to be done via a deed of variation.

opinions4u

If there are rumours of redundancies there is no need to mention it.

If there is formal notification of your business area being at risk of redundancies then this should be mentioned and will make a change of lender unlikely.

zzzLazyDaisy

You have already been notified that your job is at risk of redundancy and you are in the consultation period? And you are proposing to apply to a new lender for a new loan, in the knowledge that there is a serious risk that in the next few weeks you will be out of a job with no earned income?

That is mortgage fraud. Worst case scenario, you could be prosecuted (although I don't know how likely that is in practice).

I also don't know how often lenders actually contact employers - but when I last took a mortgage the lender did contact my employer, and my employer copied me in to the correspondence - although they had no obligation to do so.

Your current lender is stuck with you, regardless of your changed circumstances, so it would be better for you to speak to your current provider and see what they can offer you. This can often be done over the phone with no survey/checks.

zzzLazyDaisy

According to your other thread, this is a multi national which has announced more than 100 job losses and has already entered into the formal redundancy process

https://forums.moneysavingexpert.com/discussion/4368605

Employers are required by law to notify the secretary of state if they are proposing to dismiss more than 20 employees within a 90 day period. This will already have been done, so it is also very likely that this will have been reported in the press. The point is that the lender will almost certainly be aware that your employer is in a redundancy situation and is likely to be extra vigilant when a new application arrives within days of an announcement of this nature.

kingstreet

mrobsessed wrote: »

Maybe I should rephrase my original question:

I'm not asking 'what would you do?', I'm asking 'what are the risks and pitfalls for doing what I've suggested?'.

Does anyone know or have an opinion on this?

Thanks.

I would expect a lender to be aware of the situation at the firm you work for and to request an employer's reference during the application process.

This will reveal the possibility of redundancy and may see your application declined. At worst, you could be added to the National Hunter Anti-Fraud database, alerting other lenders to your situation.

https://www.nhunter.co.uk

mrobsessed

Angry_Cat wrote: »

Doesn't your current lender offer any lower rates ?

If you remortgage you will have to pay all the associated charges and fees, which could mean any saving with a different lender is in real terms reduced.

My current lender isn't offering anyhting attractive as I am still tied into a 5yr deal (although the penalties are only about £550). Hover the rates on offer aren't great and there is a £1000 set up fee as well.

The deal I'm looking at offers free legal work, no fee, a lower rate and only costs £100 to set up.