At risk of redundancy between exchange and completion

Rustyman33

Hello all, I've surfed this fantastic forum for many months, now comes the time for my first post...

My girlfriend and I exchanged contracts on Monday (18/01) for the purchase of our first home. Only for her to receive the news yesterday (20/01) that her job is at risk of redundancy. It's a joint mortgage offer from Nationwide, and today I face picking up the phone to inform them of our "material change in financial circumstances" (on the first page of our written offer).

I have read various threads on here, from which I've concluded that I'm not prepared to run the risks of not telling my mortgage lender. My question is, has anybody got first-hand experience of the final outcomes of a scenario like this?

Has anybody been in this or a similar position? If so what did you do? And what was the result?

Any guidance or insight will be greatly appreciated.

jbainbridge

You've exchanged ... you're committed now. I presume you intend to go through with the purchase?

I wouldn't tell them anything as your circumstances haven't changed. Surely we're all 'at risk'. If she is out of work for a while could you manage?

lush_walrus

I agree with above, nothing has changed for you yet. You are both still employed in the same role you were previously and are no clearer on the future than anyone else.

Wait and see what happens, if the worst case scenario happens are you able to pay youths mortgage on your wage?? And is your girlfriend in an easily employable role / area with lots of jobs? If so, the chances are even if she is made redundant she will find another role quite quickly and then no harm done.

marksoton

Risk of redundancy is a legal process her employer has to enact. I wouldn't classify it as a material change in circumstances. Not yet anyway.

I went through this process twice in the space of 2 years but kept my job.

Her salary is still being paid and this may well not change.

If you pull the purchase and mortgage now you'll potentially owe your vendor a substantial sum of money.

It's a rare occasion where i think you could be too honest.If she does lose her job and can't find alternative employment then that's a different matter.

Rustyman33

Thank you jbainbridge, lushwalrus and marksoton.

My worry and concern is if the lender undertakes a spot check of her employment status, would it show up as her being at risk of redundancy?

Whilst I don't want to own up and tell them, lose our deposit and face paying the vendor's fees, I'm even more worried that if I don't tell them, we could be accused of defrauding the lender...

marksoton

Rustyman33 wrote: »

My worry and concern is if the lender undertakes a spot check of her employment status, would it show up as her being at risk of redundancy?

The lender won't be party to that information.

What you do need to do is start planning for how you'll organise your finances if she does lose her job.

lush_walrus

Its a bit like everything else in life these things only get checked if there is something that flags up

However, it is clearly making you nervious, perhaps your girlfriend could speak to her HR to find out if this is a private and confidential matter of whether it is information they, should the lender contact them, be obliged to hand over. I have no idea to be honest on that, when we have made redundancies we have brought in an agency to handle the legal side for us and this has never arisen.

Before doing anything, see if your girlfriend can ask her HR department whether her at risk status is confidential. If it is they have no way of knowing.

AnotherJoe

"material change in financial circumstances"
=====
The way you explain it, she hasn't had a material change in financial circumstances ?

She is at risk of redundancy, which is a different thing entirely.
But everyone here apart from those who are self employed or retired is similarly at risk.
They may not know it or think it but it can come out of the blue.

A spot check of her employment status would show her as employed. Because she is.

If you pull out after you've exchanged you are in for a certain boat load of expense. If she does get made redundant which presumably from what you right is several months off she may still get another job at her current employer or otherwise, she will get redundancy money and you'll cope, eg uncertain risk. I'd trade uncertain expense over certain expense every day.

I presume you have your mortgage arranged so you could cope on one salary anyway, thats what the organizations do when they arrange them.

Tell them something now, which is what "well there's a rumour at work ..." or "her employer said she might ..." . and you've just opened pandoras box for IMO no good reason.

Rustyman33

Thank you marksoton, lush walrus and AnotherJoe. Some sound advice here.

For clarification, the lender received a copy of her contract last year, which clearly states that it ends in March. The company have now extended the contract to the middle of April, and in the meantime they will be seeking to redeploy their employees.

I will ask my girlfriend to speak with HR and ask whether they can confirm in writing that this is a private and confidential matter.

Sianybaby82

In your position I would not inform the lender unless you want them to withdraw the mortgage offer.

Mortgage companies only contact the employer if they have a concern. They would have done this prior to sending out the Mortgage and definitely before exchange.

Try not to worry about this, sit down and work out your finances to ensure that you could still manage the mortgage on one wage.

Rustyman33

Thank you Sianybaby82.

My girlfriend has spoken with her manager this morning (who funnily enough used to be a mortgage adviser), and she concurs with you guys. The company have had to inform my girlfriend of these circumstances, but they are not obliged to tell our lender.