Quit Job before exchange?

lindsaygalaxy

Just a quick question that came up last night. A friend is buying a house with her OH. He has quit his job (without another one!) while there mortgage is going through. He said that it is in place but they havent exchanged contracts or anything on the house they are buying. They are FTBs, no chain, currently living rent free at home. My friend is self-employed so her income isn't included on the mortgage but she is included on it.

Will the sale go through? He is very confident and she trusts everything he says.

jaybeetoo

He needs to tell the mortgage company of his change in circumstances before exchange.

melj16

Why would he do that??

they could check on his employment at any time, and if he doesn't declare then I'd imagine it would be class as mortgage fraud.

jaybeetoo

melj16 wrote: »

Why would he do that??

they could check on his employment at any time, and if he doesn't declare then I'd imagine it would be class as mortgage fraud.

You answered your own question!

ethank

A silly man. You should not make any decisions like that until after you move. What will he do if they pull the mortgage?

Yorkie1

jaybeetoo wrote: »

He needs to tell the mortgage company of his change in circumstances before exchange.

Absolutely. It is a contract of good faith, and they are obliged to tell the mortgage company as soon as a change in circumstances occurs.

kingstreet

So, lets run a little scenario.

Lender isn't told about resignation. Case proceeds to exchange of contracts, with solicitor sending report on title to lender.

Lender pulls case for routine audit and re-checks income, employment and credit as they often do. Resignation comes to light. Mortgage offer is withdrawn.

Completion cannot take place. Applicant loses deposit and is sued by other chain members for expenses and compensation.

jcgalliard

kingstreet wrote: »

So, lets run a little scenario.

Lender isn't told about resignation. Case proceeds to exchange of contracts, with solicitor sending report on title to lender.

Lender pulls case for routine audit and re-checks income, employment and credit as they often do. Resignation comes to light. Mortgage offer is withdrawn.

Completion cannot take place. Applicant loses deposit and is sued by other chain members for expenses and compensation.

Unless he exchanges and completes on the same day.

kingstreet

jcgalliard wrote: »

Unless he exchanges and completes on the same day.

Yes.

However, the intention of my post was to cover the worst case scenario and discourage any non-disclosure, not to provide a way of getting around the potential issue.

jcgalliard

kingstreet wrote: »

Yes.

However, the intention of my post was to cover the worst case scenario and discourage any non-disclosure, not to provide a way of getting around the potential issue.

Yeah totally I agree.

But in a "genuine" case of someone losing there job between exchange and completion - what would happen to the deposit if the lender found out/was told?

getmore4less

She need to walk away from this purchase and not be on any documents or contribute any money.