Mortgage conundrum!

poddy21

I've also posted this in the Redundancy forum.

I'm about to be made redundant at the end of Feb, and my fixed rate mortgage ends in March!
I do have unemployment insurance but am wondering what to do.
Is it likely I may get a new fixed rate deal? (The insurance company woul probably want me to because it means they will pay out less money)
The mortgage company will probably not offer me a new deal because I'll be unemployed?!

I will be getting a payment equivalent to a years salary after tax, but currently don't have a job to go to - although I may be able to pick up some contracting work.

If I stick to the SVR its likely to be something silly like 5.5%

Anyone ever been in a similar situation?

getmore4less

Depending on the redundancy package/income if it takes you into the 40% tax I would probably take a month off and start work next tax year if you can any work this year is probably not worth it unless it secures a long term job.

How long before the insurance kicks in, it will probably require a JSA claim so get ready to kick that off the day you finish

poddy21

Thanks for the reply.
It won't take me into the higher tax bracket, however I will need to purchase a car as I will also lose the company one

I'm unsure if the mortgage company will offer me a new deal or if I will have to go on the SVR - I guess the only way to find out is to call them, but I have a feeling I know the answer

I know what you mean about taking a month off, but there may be some fairly well paid contract work I could do for a few months which would mean I wouldn't need to touch my redundancy money. It would be nice to keep it intact for as log possible without spending (too much) of it

getmore4less

If the earnings for the year with the taxable part of any redundancy(over 30k) still has you below the £42k mark, then starting work ASAP is senible and contract will be the way to go if the jobs are there.

If you think it may be a longer(1y) term option then with ltd you can probably move some of the earning into the 2014-15 tax year anyway.

Just make sure you do take some time off during/between contracts.

getmore4less

On the mortgage front I would just ask them if they have any deals you may be able to secure one now for end of march depending on lender.

poddy21

Thanks for the helpful advice
I think I'll call them and request a new fixed rate deal and see what they offer

patman99

I would suggest that the only people who would be able to answer your question would be your mortgage provider.
Even if they refuse to keep you on a f/r mortgage due to your loss of job, there is nothing preventing you looking at other mortgage deals once you are back in work.

financially_sound

Switching to a new fix deal with existing mortgage provider should be very simple. No credit and affordability checks. Ask on the mortgage forum. Also, some lenders let you switch 3 months earlier with no penalty (e.g. Halifax, Nationwide).