Furloughed after Mortgage Offer - Broker says not a problem, is this right?

Thrugelmir

SimonBck said:

donkeyk22 said:

Ok I need to speak to the broker tomorrow. I'm hoping that they (the broker) have been given guidance that if the only change is an applicant has been furloughed on the government scheme the lender doesn't conisder it a material change, and they only need to be notified if the income has substantively changed (e.g. self-employed, reduced hours, etc.) This seems at least plausible, as if they do consider a furlough a material change they are going to be re-reviewing an awful lot of recent applications and, given the number of payment holiday requests they'll also be having to review and process, I'm hoping they've seen the wood for the trees. Either that, or it's a convenient way of getting out of the lend...

The annoying thing is that a substantial piece of our outgoings was on childcare, and as the nursery is currently closed (and is one of the few that isn't still insisting on payment of fees during their closure) our net income position in the immediate short-term has has actually improved, not worsened, even with the furlough considered!

Totally agree with you. There must be many cases like this.
I will be going back to full pay, to miss out on the house we are buying for the sake of a temporary change would be upsetting. 

Is the change temporary. Asked rhetorically as obviously have no idea of your personal circumstances. 

SimonBck

Thrugelmir said:

SimonBck said:

donkeyk22 said:

Ok I need to speak to the broker tomorrow. I'm hoping that they (the broker) have been given guidance that if the only change is an applicant has been furloughed on the government scheme the lender doesn't conisder it a material change, and they only need to be notified if the income has substantively changed (e.g. self-employed, reduced hours, etc.) This seems at least plausible, as if they do consider a furlough a material change they are going to be re-reviewing an awful lot of recent applications and, given the number of payment holiday requests they'll also be having to review and process, I'm hoping they've seen the wood for the trees. Either that, or it's a convenient way of getting out of the lend...

The annoying thing is that a substantial piece of our outgoings was on childcare, and as the nursery is currently closed (and is one of the few that isn't still insisting on payment of fees during their closure) our net income position in the immediate short-term has has actually improved, not worsened, even with the furlough considered!

Totally agree with you. There must be many cases like this.
I will be going back to full pay, to miss out on the house we are buying for the sake of a temporary change would be upsetting. 

Is the change temporary. Asked rhetorically as obviously have no idea of your personal circumstances. 

Yes the change is temporary.

Windofchange

It's certainly a difficult one. I guess there is a worry that should the bank ask for any sort of payslip before letting you draw down the mortgage then there may be a bit of concern from the underwriters as to why you haven't told them about the change, even if it is just temporary. Hard to say what I would do if faced with the same situation. As I understand it, generally banks will just perform another credit check before releasing the funds, but I have heard of people being asked to provide further wage slips. Perhaps the risk of this happening goes down the more of an A grade borrower you are - i.e. if you have a low LTV and earn 200k per year then you are maybe less likely to suffer further checks than someone needing 95% LTV and earning 15k per year. I dunno. I would hope that any bank looking at your circumstances and that you will be back to full pay once this has all blown over would have a sympathetic view, but I guess from their point of view there is no guarantee that you will go back to 100% salary, so that is maybe what makes it hard!?

SimonBck

I am still 2-3 months from completion so a good bit of time for my salary to go back to normal. I am hoping my broker can have a conversation with the lender rather than just keying in the new figures. 

elliem123

Hi all, Did you get a response from your brokers regarding having to inform mortgage lenders? 

MovingForwards

elliem123 said:

Hi all, Did you get a response from your brokers regarding having to inform mortgage lenders? 

Any change of circumstances must be reported to your lender before the mortgage starts. Have a look on your lenders site and see what their stance is regarding furlough; some are recalculating affordability etc.

My lender did a pre-completion phone call, one of the questions was "have your circumstances or outgoings changed since your application", my response was 'no, I'm still working and have been throughout, no change for me" 

helloburger

Hey, have you got an update? What did the broker say? 

MovingForwards

helloburger said:

Hey, have you got an update? What did the broker say? 

Start your own thread, providing your circumstances and get opinions specific to you.

120624

Just to note here, I’ve just completed my purchase with NatWest and they didn’t contact us or our solicitor to discuss any changes in circumstances, we do bank with them though not sure if that’d make any difference.

Thrugelmir

120624 said:

Just to note here, I’ve just completed my purchase with NatWest and they didn’t contact us or our solicitor to discuss any changes in circumstances, we do bank with them though not sure if that’d make any difference.

That's because the onus is on you to declare material changes to your original application. Assume you read the disclosure agreement when signing the application form?