Employment contract not being renewed! How will this affect my offer of mortgage?!

kellyt86

Dear all,

Recieved some really bad news today that my employer is not renewing my contract, through no fault of my own, and despite them telling me they were (I will post on the employment forums for this and how to complain).

So I am currently buying a house and we are at the stage of having recieved a formal mortgage offer, and the solicitors are having a first look at the contract.

So with this now being the case with my contract of employment not being renewed does this mean I have to tell the mortgage company who will recind the offer :eek:

I think we would still like to go ahead as I will seek alternative employment or JSA temporarily. I was only working part time earning £400 per month.

I know we can still afford the house as its shared ownership and with mortgage and rent combined is still £140 per month less than we pay in rent alone now.

Do I need to tell the mortgage company????? My thought is that if this was after the fact of moving then I would have to deal with it and pay for the mortgage regardless!!

I am gutted and will be complaining to my employer who stated this would not happen!!! :mad: Otherwise of course I wouldnt have proceeded with the house purchase.

PLEASE HELP!

Tjrw1985

Not only would the mortgage company rescind the offer, you may fall out of affordability with the housing association for the shared ownership.

Up to you I suppose.

kellyt86

Thank you,

Is it illegal for me not to declare it though to either the mortgage company or the housing association at this stage?

Many Thanks

Wh05apk

There will be a condition in the offer stating you need to advise them of any change in circumstances before completion, I'm sure a lot of people don't, but if caught, it could be classed as fraud.

Is the mortgage still affordable based on your OH income?

kellyt86

Yes I thought this would be the case...

We haven't actually recived the written offer yet, so I will wait and see what it says.

I think based on the lenders affordibility they are likely to say no, although if we didnt go ahead we would be worse off by £140 per month.
OH income is £9500 per year, we have no debt or outgoings like child maintenance and claim working tax credit also, which will go up of course now I am about to be unemployed, they should go up to about £3k for the year.

The mortgage amount is for £54k.

Thanks

jacques_chirac

kellyt86 wrote: »

Yes I thought this would be the case...

We haven't actually recived the written offer yet, so I will wait and see what it says.

I think based on the lenders affordibility they are likely to say no, although if we didnt go ahead we would be worse off by £140 per month.
OH income is £9500 per year, we have no debt or outgoings like child maintenance and claim working tax credit also, which will go up of course now I am about to be unemployed, they should go up to about £3k for the year.

The mortgage amount is for £54k.

Thanks

Sorry to be blunt, but do you really think you are in a good position to be buying a house when you have a joint income of £14,300 (when you are in work)? Tax credits are not a reliable source of income with all the benefit changes, and if you do need to claim benefits, you'll get far more if you rent.

Use this as an opportunity to take a realistic view of your situation, and put aside your wish to buy until you are both earning decent salaries.

kellyt86

Well we are only buying 50% of the house. And as stated we are better off by £140 per month, by paying mortgage and rent of £360, as opposed to current rent of £500 (which by the way rent is cheap for prices around here).

Also our mortgage offer is based on £0 working tax credit, as the paperwork for our renewal didnt come through in time.

Apparently you can claim housing benefit through having a shared ownership, but the online calculator said we are not entitled to it. Online calculator also showed not entitled to housing benefit at current house either.... so for us it is still a saving of £140 per month.

And of course I will hopefully get different employment very soon. And if not JSA in the meantime.

jacques_chirac

kellyt86 wrote: »

Well we are only buying 50% of the house. And as stated we are better off by £140 per month, by paying mortgage and rent of £360, as opposed to current rent of £500 (which by the way rent is cheap for prices around here).

Also our mortgage offer is based on £0 working tax credit, as the paperwork for our renewal didnt come through in time.

Apparently you can claim housing benefit through having a shared ownership, but the online calculator said we are not entitled to it. Online calculator also showed not entitled to housing benefit at current house either.... so for us it is still a saving of £140 per month.

And of course I will hopefully get different employment very soon. And if not JSA in the meantime.

Did you pay full NI Contributions for tax years 11/12 and 10/11? If not, you will not receive any JSA.

That £140 has to cover insurances, maintenance etc. Do you have savings for when things go wrong? A faulty boiler, a leaking roof ...

You would be eligible for housing benefit on the rent element of the house, but for the mortgage element you would only receive help with the interest, and only after a thirteen week waiting period.

Sorry, I really don't think you have thought this through.

John1993_2

kellyt86 wrote: »

Thank you,

Is it illegal for me not to declare it though to either the mortgage company or the housing association at this stage?

Many Thanks

Yes, it will be fraud if you proceed, as you will have agreed to tell them of any material changes. Losing your job falls into that category.

Poppy9

When you provided proof of earnings did you inform them you were on a fixed term contract? If so they would have known you had no guaranteed employment after a certain date.

kellyt86

Thanks for the replies.

Yes I said I was on fixed term but they didn't ask for end date or for copy of my contract or anything.

I said I had already been told it would be renewed for another year (as I had been told this by my employer)

They just asked for payslips. Although my OH had to have an employers reference, I didn't!