Change of circumstance or job loss post-Exchange

movvy

Hi all,

My wife and I have recently put a reservation on a new build that has come up in our area. We've spoken to a broker and have been advised on an initial check that it is within affordability with the Halifax on our chosen route of Help to Buy with 10% down, 10% equity (in actual fact, we also need to put in the £999 arrangement fee so it's quite tight).

We've not yet formally put in the application and not yet formally received an offer but the broker did not think there would be any major issues.

But I worry. The completion on this new build is not until April/May 2018 and the developer wants an exchange (like a lot of developers do) within the next month or so, whereby we have to put the first 5% deposit down.

My line of work is fairly stable and, touch wood, my employment is not a problem.

My wife works in a more problematic sector however, which is currently under a lot of pressures (childcare).

I understand that we have to let the broker/lender know of any changes in circumstance or job losses. But what happens if the nightmare scenario occurs and my wife loses her job or has to find a new job?

1) If she gets a new job with the same or better income, I would hope that nothing fundamentally changes. We let the lender know and it should be ok? Same or better affordability?

2) If she gets a new job on lesser income, I assume we re-check affordability. As it is so tight at the current level, is it possible to change the Help to Buy ratio to 5% down, 20% equity after exchange but before completion, or do we have to simply put more deposit down?

3) Do any of these scenarios result in us losing the 5% we've already put down?

4) Is it possible that despite getting a new job, a lender might get twitchy and just withdraw altogether but still expect us to complete, forcing us to find a new lender entirely? (And can we just go and find a new lender to complete? Would we have to put more deposits down or is that lost?)

Sorry. FTB questions! Thanks in advance.

David_White

Halifax are one of the most flexible on this.

If a job is lost during the process but you secure a new one and have a contract then affordability permitting it should be ok. In this scenario I'd expect Halifax to do an employers reference for the new job to make sure it checks out.

You can make multiple changes with a Halifax application mid-process so tinkering with deposit sizes etc doesn't have to be problematic.

I would really ensure you have a capable broker dealing with this as whilst all of these things can be handled with minimal fallout I have seen many brokers make a total hash of it.

movvy

Thank you David. Your last point is the biggie that I suppose I cannot be sure of, having never gone through this before.

The broker certainly seems competent so far, and I wouldn't expect anyone to offer a critique of brokers on here, but I'm still awaiting their response on this specific issue and I'm not sure how they'd handle the scenario should it happen.

The news about Halifax puts my mind at rest somewhat. I suppose this is a risk with new builds that I have to accept and weigh up?

Your reply implies that any deposit monies I put down at exchange would not be at risk if I had to re-assess and that, possibly, changing the Help to Buy from 10%/10% to 5%/20% might be feasible?

David_White

I can't categorically say the money you part with at exchange isn't at risk as you are legally bound at that stage so you need to be extra careful that no payments get missed/you don't take out loads of extra credit etc.

I have cases placed with Halifax that need to be amended for one reason or another on a fairly regular basis and it doesn't have to be a painful process.

Confidence in a broker is always going to be hard to gauge when they are a stranger to you. All you can really go on is your gut feeling and perhaps online reviews if they have any.

Thrugelmir

movvy wrote: »

I suppose this is a risk with new builds that I have to accept and weigh up?

You need also to consider the impact on your lives if there is short term financial disruption. What's your capacity to deal with a negative scenario. Coping with the worst possible outcome is the key.