Risk of Redundancy before Exchange

agiisab

Hi all,

I’ve read so many threads here and all seem to be very helpful answers but I couldn’t find one that’s true to our current situation. Please help!

We’ve sold our house and buying a new build. Mortgage offer received form the lender, everything is going as planned to complete end of May. Currently waiting for searches to come back on the new build. Our house is sold to an investor so they’re happy to wait - luckily.

My girlfriend is called to a meeting next Weds, where they will (99% sure) announce that they’ll make everyone redundant.

We’re worried sick until then but of course weighing up different scenarios and what we should do. We think that the employer will set a date around September. Plan for us is to complete by June the latest - which is not guaranteed with new builds.

Question is; if at all, when should we tell the lender that she might be made redundant?
I think we should wait until last minute if possible (end of August once mortgage payments are going out) but worried that they might check employment status again, right before exchange and the redundancy fact will surface? Do they check employment status before exchange after the offer is received?

I can definitely afford the mortgage by myself it’s just the risk of not getting the mortgage at all that’s the biggest worry right now.
Please help, anyone’s been in the same situation before?

letitbe90

Technically you’re obliged to tell the lender any material information that might affect them lending as soon as you know.

Saying that, if you said nothing, they’ll never find out and won’t double check the status.

It is up to you what you want to do. By disclosing it, you might lose your mortgage offer (or might not if lender believes work history justifies that she can get another job by then anyway) but it is so lender specific.

AnotherJoe

Have you exchanged ? If so, I woudl do nothing even though that's not the legally correct thing to do. But pragmatically as long as you can afford the mortgage then should be OK.
I suppose again being pragmatic how public would this be ? Eg does she work for very well known company and this will be in headlines, or obscure department of obscure company so no one will notice ?

davidmcn

agiisab wrote: »

We think that the employer will set a date around September.

What do you mean by "set a date around September"? That they won't confirm who's being made redundant until September? Or that that will be their last date of employment?

I don't think there's an obligation to advise merely that the employer is consulting about redundancies. There's certainly an obligation to tell the lender once it's been confirmed that you're being made redundant. Any stages in between are probably a grey area e.g. if you're in a pool of which 50% will be selected for redundancy.

After completion, you don't need to keep the lender advised about changes to your employment.

agiisab

Thanks letitbe90!

AnotherJoe: We’ve not yet exchanged - that’ll happen in the next 2-3 weeks. I was unable to edit the post after realising I left our this important piece of info:
the the company she works for is also our lender.
Having said that, I don’t believe they do an “internal” check as to who might have applied for a mortgage from their own people(?) and is being at risk.

davidmcn: Thanks for the reply! By September I mean that will be her last date if employement. They generally give 6 months notice - from recent previous redundancies, that’s our guess.

Thanks for all your replies, it’s very helpful and like you say, this is a very grey area so we’re really not sure - even though my partner works with mortgages every day.

davidmcn

When you say you can afford the mortgage by yourself, do you just mean you'd be comfortable with it, or do you mean you'd satisfy the lender's requirements if your partner wasn't earning?

Mutton_Geoff

Won't she be able to find another job?

getmore4less

What do you do if you exchange and then can't complete as the mortgage has been withdrawn.

You will know more next week and you have until exchange to consider the options.

Have you looked at mortgage affordability(from a lenders perspective) with just one income.

agiisab

davidmcn wrote: »

When you say you can afford the mortgage by yourself, do you just mean you'd be comfortable with it, or do you mean you'd satisfy the lender's requirements if your partner wasn't earning?

I mean I would be comfortable with it but not to satisfy the lender - not to the amount we need to borrow for this house.

agiisab

Mutton_Geoff wrote: »

Won't she be able to find another job?

Yes, she will definitely be able to find another job as she is very employable based on previous experience and open roles in the area, so that's not a worry. But we are worried that the Lender will find out about risk of redundancy prior to exchange and they pull the deal.

getmore4less wrote: »

What do you do if you exchange and then can't complete as the mortgage has been withdrawn.

You will know more next week and you have until exchange to consider the options.

Have you looked at mortgage affordability(from a lenders perspective) with just one income.

No, we haven't looked at affordability but pretty certain that the amount we need won't be granted based off of my own income only. Like you say, we will know more next week. I just hope they don't do another employment check prior to exchange, that could mean we have to look at other options. Of course, because the Lender is also the Employer, it is an unusual position for us to be in. We don't want to be dishonest but also don't want to lose the offer as very confident we can make payments and that she will be employed whenever they may make her redundant.

Thanks again for all your replies!

getmore4less

how long has the GF worked at the place?

when you say lender is employer you do mean your employer not hers?