Company in Consultation due to future redundancies - can I apply for mortgage?

yessuz

Basically situation is, that the company I work for now is in consultation phase and my employment, as everyones else, is "potentially at risk".

We are planning to buy our first house (we got deposit ready, have agreement in principle (which expired like a month ago...)), but now my question is - if i will apply for a mortgage (we would be a first time buyers), will I get one?

or it will be immediate mortgage decline on the credit file?

amnblog

Why would you take a mortgage out when you are unsure about your continued income?

yessuz

Well, because i feel that paying rent which is at the same amount I would pay for mortgage (=/- few pounds) is a waste of money.
also, I am in quite strong position during the process, and in the end of the day, in worst case, I got very generous package which would cover me for almost a year.

having said that, I see absolutely no difference between renting (current situation) and paying mortgage as in both ways, am I redundant or not, I still have to pay same more or less same amount.

I am 10 years with the same employment so it is quite good for me I believe

lewishardwick

When I completed my mortgage application my broker was very clear is asking if my employment was at risk. Any redundancy consultations or the like, either in progress or the potential to happen.

Take a look at this from the GOV website , you may not be entitled to as much as you think...

Based on the information from the site above, I wouldn't even get a months wages, yet I've been in employment for over 5 years!

yessuz

no, my company has enhanced redundancy scheme, so i know how much I would get with all redundancy and PILON it will accumulate close to 10 months salary or so.

lewishardwick

Lucky you!

I'd still imagine most lenders would be twitchy about someone who may lose their job. Best have a word with your broker.

getmore4less

The main reason for not buying while your job is at risk is you don't know where you will be working.

Any purchase may restrict your new job search or involve longer commutes and expense.

The sensible thing is to keep looking for the right place with a view to proceeding when the job situation is clearer.

Even if an application is considered while "at risk", they may delay approval till the situation is clarified or if they do make a offer and you get put on notice then there is a good chance it will be withdrawn.

Goldiegirl

There's nothing to stop you applying for a mortgage, but you must be honest with any prospective lender, and tell them that you are at risk of redundancy.

That'll more than likely stop the application dead in its tracks, so surely the most sensible thing to do is to wait until the situation has been resolved.

yessuz

all, thanks for your insights!
i will wait till the situation is clearer not so much time to wait to be honest

banks4u

You sound like you work for my company, the whole company was placed at risk but it turned out that our specific part wasn't affected. Also the employment reference the lender asked for had nothing about being on risk. As soon as your clear I would suggest taking redundancy cover