Is it possible to insure against loses due to inability to complete after exchange?

6am

What would happen to a mortgage if the buyer loses their job after the exchange but before the completion. Would the lender still release the funds?

Is it possible to get an insurance that will pay out the lost deposit + costs if the completion collapses for certain reasons? The scenarios I want to insure against
- I lose my job and the lender is unwilling to release the funds
- Solicitor disappears with my savings (In this scenario I would like to get back savings I sent to a solicitor + lost deposit + costs)
- lender collapses and unable to provide the funds
- the banks where I hold savings collapse and I lose an immediate access to savings to complete the deal. I might regain access after FSCS pays out but I will be unable to complete on time
- the bank where the solicitor holds funds collapses

I am most concerned about the scenario when I lose my job and lender is unwilling to release the funds. Reliability of solicitors is also a concern.

AnotherJoe

If you are concerned this is an imminent issue, then dont buy, pull out.

If you aren't, but are just a very nervous person*, do an exchange / complete with as short a period as possible between them. Same day for example.

* The odds of some of your scenarios are close to zero and will come with insurance anyway, so I'm thinking this is the problem. Are you sure you are cut out to buy a house? Perhaps spend the money you'd spend on insurance (never heard of such a policy though) on CBT treatment?

6am

Thank you for your reply. No, the employment issue is not imminent. I am happy to complete even if I lose my job. I have enough savings to make mortgage payments and for day to day spending for about a year. So hopefully I will find a new job after completion. However I will be disappointed if the lender refuses to release funds because I will lose the deposit for nothing. So the question is will they release the funds or not?

Jenniefour

What you're saying about your job is very contradictory, but it does sound as though you have some concerns or may want to leave your job before completion.

Do bear in mind that not being able to complete after exchange is a very serious issue because it impacts on everyone else in the chain who will have exchanged at the same time. It's not just about the deposit being at risk, it's about legal action being taken against you for breach of contract. You would be dealing with a lot more than disappointment.

Might be helpful to check very carefully the terms and conditions of your mortgage offer to see what it says about change in circumstances and/or mortgage offer withdrawal.

AnotherJoe

I agree with J4, you say the job issue is not imminent but you write as if it is !

So, are you expecting to lose your job? Do you have any reason to believe that is likely?

davidmcn

6am wrote: »

Thank you for your reply. No, the employment issue is not imminent. I am happy to complete even if I lose my job. I have enough savings to make mortgage payments and for day to day spending for about a year. So hopefully I will find a new job after completion. However I will be disappointed if the lender refuses to release funds because I will lose the deposit for nothing. So the question is will they release the funds or not?

No, they're entitled to withdraw their mortgage offer at any time before completion, and probably will if you lose your job. But there's no insurance products I'm aware of aimed at that scenario.

Shakin_Steve

6am wrote: »

What would happen to a mortgage if the buyer loses their job after the exchange but before the completion. Would the lender still release the funds?

Is it possible to get an insurance that will pay out the lost deposit + costs if the completion collapses for certain reasons? The scenarios I want to insure against
- I lose my job and the lender is unwilling to release the funds
- Solicitor disappears with my savings (In this scenario I would like to get back savings I sent to a solicitor + lost deposit + costs)
- lender collapses and unable to provide the funds
- the banks where I hold savings collapse and I lose an immediate access to savings to complete the deal. I might regain access after FSCS pays out but I will be unable to complete on time
- the bank where the solicitor holds funds collapses

I am most concerned about the scenario when I lose my job and lender is unwilling to release the funds. Reliability of solicitors is also a concern.

You missed "What if an asteroid strikes the earth and destroys civilisation?"

G_M

Shakin_Steve wrote: »

You missed "What if an asteroid strikes the earth and destroys civilisation?"

Then the lawyers will get rich aruing in court about whether it's an Act Of God, or Accidental Damage.

Shakin_Steve

How about a policy insuring against anything bad ever happening? One of those should just about cover it.

G_M

Shakin_Steve wrote: »

How about a policy insuring against anything bad ever happening? One of those should just about cover it.

Hmmm.... I get angry when weather forecasters warns of bad weather. I love rain - so what the forecaster calls 'bad' I call 'good'.

stator

It's a sensible thing to consider but I don't think there's an answer.
Losing your job or getting in some kind of accident that leaves you unable to work and hence you lose your job could indeed cause massive problems if it happens in that short space of time
The only answer is to keep that space of time as small as possible. Exchange and complete within 7 days max, less if you can get away with it.
I think most people in that situation would just keep quiet for a few days and let the mortgage go through. I think it's unlikely they will notice unless your employer is a very large employer and when it goes bust it's reported on the new.