Change of Employment Status After Exchange, Before Completion

user01906

I've gone anonymous for this post (due to paranoia!) but am otherwise a fairly regularly-contributing member of the forum so please don't think me a leach! Sorry in advance for the long post.

I have a mortgage offer, am due to exchange next Wednesday and complete a fortnight after that. However, I'm growing increasingly concerned (not without reason) that between now and completion I may receive notice of redundancy as a result of the possible liquidation of my company.

Even in that scenario my partner and I would be absolutely fine in terms of repayments for at least a year and as such I'd have absolutely no qualms with proceeding with my mortgage/purchase as planned. I wouldn't intend to inform my lender, solicitor or broker of this information (I'm aware that this is technically an obligation), my concern is that the lender will somehow become aware of the closure of my company (it's a reasonable size international company so any closure will be covered in the media to some degree if not exactly frontpage news) and subsequently withdraw their offer to borrow.

Is this a realistic possibility? Would a lender make further employment checks after making a formal mortgage offer? Is the process 'human' enough that they might pick up on media coverage of the closure of my employer and match this in some way to the fact that this is my stated employer in my application/offer?

My ultimate concern here is exchanging contracts (and thus handing over c. £40K deposit) and then having to renege on the deal due to not being able to secure alternative borrowing if the original mortgage offer is withdrawn, that's unsurprisingly not an amount of money I can in any way afford to lose!

On the flip-side, I don't currently have anything to declare. The company isn't officially in the process of bankruptcy and there's been no official mention of this to staff, though I'm senior enough to know this scenario is ultimately fairly likely.

I feel like this must be a reasonably common set of circumstances. Any words of warning/comfort?

Thrugelmir

user01906 wrote: »

I feel like this must be a reasonably common set of circumstances. Any words of warning/comfort?

The obligation to inform is yours. Failure to conform to the terms and conditions you agreed to. Therefore comes at your own risk.

A lender has internally set operational policies to follow. In that this is a business transaction governed by contractual law. As black and white as that.

Will you lose your job instantly though? Being international company I assume it to be of a size. So would require a more structured closure than simply being liquidated.

maninthestreet

Can you delay exchange until you know if you really are going to be made redundant??

stator

It's entirely possible the lender would find out about the bankruptcy, so it's your decision whether to take the risk or not.
Can you exchange and complete on the same day?

TJParsons

Is the company listed in any way?

user01906

Thanks all for your responses thus far, truly appreciated.

@Thrugelmir No, I wouldn't expect to immediately lose my job by then as the close-down would realistically take weeks/months rather than days but may well have receive notice of redundancy (or at least notice of risk of redundancy).

@stator Would like to arrange exchange/completion for the same day (we're not actually planning to move immediately so wouldn't be sitting in a van with our belongings or anything) but I feel like demanding this now would raise flags given we've already agreed (though not signed) our exchange/completion dates.

@TJParsons company is not presently listed in any way.


I suppose my question really is - how likely is it that my would-be lender will become independently aware of any change in my employment details and revoke their offer accordingly? This can't be an amazing uncommon set of circumstances but there seem to be very few real-world example of this happening (at least as far as I can see from Google).

muhandis

While I am not privy to the inner workings of a lender, I find it hard to conceive that there would be processes in place that would pick up a company announcing that it is in trouble and then linking it to borrowers who work for that company.

In your place, given that we are talking about a 3 week period at most (1 week to exchange + 2 to complete) and you express confidence about being able to service the mortgage even if you are made redundant, I would assess the risk of an offer being withdrawn as minimal and proceed as planned.

user01906 wrote: »

I suppose my question really is - how likely is it that my would-be lender will become independently aware of any change in my employment details and revoke their offer accordingly? This can't be an amazing uncommon set of circumstances but there seem to be very few real-world example of this happening (at least as far as I can see from Google).

Thrugelmir

user01906 wrote: »

I suppose my question really is - how likely is it that my would-be lender will become independently aware of any change in my employment details and revoke their offer accordingly? This can't be an amazing uncommon set of circumstances but there seem to be very few real-world example of this happening (at least as far as I can see from Google).

I suspect a lot of people would simply pull out of the transaction if they had any personal doubts at all. As that would the primary concern, i.e. oneself not the lender. .

stator

I don't have a clue if lenders do this but there are plenty of data services available to companies these days. Companies sell information as a service, so it's possible a lender pays someone to spot companies that are going bust and compares it to their applicants employers

user01906

I just wanted to update this thread for the benefit of anybody who stumbles upon it in the future, perhaps in a similar circumstance to me.

My employer went into administration about a week before planned exchange and I came clean to my lender (via my broker) as I felt I couldn't be confident of passing any late checks/audits of my mortgage offer in the admittedly unlikely event that such a thing occurred. In the event of the offer being withdrawn after exchange the amount I'd have lost would have been life-altering so I decided I wasn't willing to proceed without removing that risk.

I explained that my employment was presently unaffected but had to acknowledge that the risk of me losing my job in the near future was now considerable. It went back to the underwriter and after a couple of days they agreed to honour the original offer. We then insisted on same-day exchange/completion and a couple of days ago that successfully occurred; no lies, no risk, no fraud.

Just wanted to offer this up as most similar threads on here only really contain the advice that you should just keep quiet and take your chances. In some cases this isn't always necessary.

Good luck to all!

ap1985

user01906 wrote: »

I just wanted to update this thread for the benefit of anybody who stumbles upon it in the future, perhaps in a similar circumstance to me.

My employer went into administration about a week before planned exchange and I came clean to my lender (via my broker) as I felt I couldn't be confident of passing any late checks/audits of my mortgage offer in the admittedly unlikely event that such a thing occurred. In the event of the offer being withdrawn after exchange the amount I'd have lost would have been life-altering so I decided I wasn't willing to proceed without removing that risk.

I explained that my employment was presently unaffected but had to acknowledge that the risk of me losing my job in the near future was now considerable. It went back to the underwriter and after a couple of days they agreed to honour the original offer. We then insisted on same-day exchange/completion and a couple of days ago that successfully occurred; no lies, no risk, no fraud.

Just wanted to offer this up as most similar threads on here only really contain the advice that you should just keep quiet and take your chances. In some cases this isn't always necessary.

Good luck to all!

That is great news for you. Glad things worked out for you in the end...:)