Want to buy this year though there is a chance I might lose my job? Advice needed

icicat

Hello all, first post here. Let me explain my situation.

Second time buyer (bought a house with my sister 5 years ago but sold it and am currently living with mum for 5 years) I have a good amount of deposit saved up. Though I have always put off buying and just saving whilst living at home and I now know my mistake as prices for property go up and money in the bank stays the same

So I figure I really need to buy a place quick as the property in and around London are just getting too high each year.

So here's my problem. My current work place is going through a tough time and I'm not sure if it will be still going next year. The type of work I do is graphic based and it's not the most easiest to find full time roles, but not impossible. It does require me to have a good portfolio and that is something I will need to take time on.

At this point I've been working there for a good three years and I think now would be ideal if I wanted to buy. If I looked for another job and went for that I would have to wait at least another 6 months to buy and my money devaluates more and house prices go up again.

So what do you think? Should I buy now whilst I have a job and if anything does happen to the company by next year I will have to just rely on finding another job quick?

Also should I put in the full amount of my savings into the deposit? Or should I keep some aside as if I do lose my job I will need something to go on in the unemployment period. What sort of benefits can I apply for from the government if I'm in a situation where I just bought a place and lost my job?

Any advice would be great

macman

Certain benefits may help you with a contribution towards mortgage interest. None will repay any of the capital.

Kynthia

It's possible that there will always be a possible future reason not to buy so at some point you have to do your best to minimise the risks and take the plunge.

If you feel your job is uncertain then do what you need to do to maximise your employability now, buy somewhere you'd be able to travel to other jobs, and keep a few months pay in savings to cover yourself for a few months unemployment. Buy a place that has a second bedroom so that if things got tight you could get a lodger in. If your place is leasehold then don't buy anywhere that prohibits letting out the place, as if the worst came to the worst you could move back to your parents and let it for a year to pay the mortgage.

icicat

Thanks guys, some good advice there. Yes two bed would definitely have that advantage. I really want to buy a freehold house, though good point about the letting restrictions as that could be a nightmare.

So worst case scenario if I cant find work for a year and all my savings set aside are gone so nothing to pay the mortgage and I cant let it out or find a lodger, whats the worst that can happen? Could I pretty much lose the place to the bank as well as all my life savings gone into the deposit? :-S

BUSTERBOY

I would buy now if you believe you can get another job to pay mortgage. I have just sold and then got made redundant. I wasn't after anymore mortgage, just porting my existing mortgage at 16% LTV, but even my current lender wouldnt proceed.
Fortunately I have quickly got another job and its progressing ok.

70sthrowback

Have you looked into the cost of ASU benefits, for approx £50 a month it will cover some or all of your mortgage payment, I think up to £2k? if you lose your job. On top of that you are also covered if you are unable to work due to accident or sickness. Check the small print though, for example some policies require you to have it for a minimum number of days before they would pay out if you did lose your job.

Could be an option to give you peace of mind in the short term whilst you work on your portfolio etc

icicat

You know I'm pretty gutted I didn't chose the ASU benefits as part of my work benefits scheme last year. Though I guess this can be purchased outside of work, just a bit more costly.

I think a good plan would be to get the place then start looking for jobs. Though I think if I stuck around and did get laid off I might get a good redundancy, enough to keep me going for a month or two.

A job position has just come up now and its a good one! How long would I usually need to wait to get a mortgage approved if I get a new job? 6 months?