Lose Job Lose House

CinderKona

Hello,
I am at the pre-contract stage but moving quite tentatively as prices seem to be decreasing in this area but I expect I will honour the agreed price back in March, subject to the survey, but I was wondering if you do happen to lose your job after the exchange, is it a given you lose your house. I am lucky that I held back some savings that might last a year or so. As well as having some in a limited company that I did not use.
thanks

Bossypants

Are you buying with a mortgage? If so, could you still afford payments if you lost your job (even if you lost it after completion)? 
If you lost your job between exchange and completion, you wouldn't directly lose your house but you might lose your mortgage, which wouldn't potentially stop you from completing, if you couldn't raise the funds to complete in some other way. Then you'd lose you both the house and the deposit.

hazyjo

If I seriously thought I was at risk of losing my job, there's no way I'd be buying.

If you're just covering every scenario in your head and it's unlikely, just exchange and complete on the same day (which is generally what's being advised in this current climate).

AdrianC

It's massively unlikely any lender would pull the mortgage offer post-exchange, because of the costs they would expose you to. B'sides, at the moment most sales are simultaneous exchange and completion.

Crashy_Time

hazyjo said:

If I seriously thought I was at risk of losing my job, there's no way I'd be buying.

If you're just covering every scenario in your head and it's unlikely, just exchange and complete on the same day (which is generally what's being advised in this current climate).

Heed this advice, and take a Wait and See approach IMO.

blue_max_3

hazyjo said:

If I seriously thought I was at risk of losing my job, there's no way I'd be buying.

If you're just covering every scenario in your head and it's unlikely, just exchange and complete on the same day (which is generally what's being advised in this current climate).

But thinking it through, he'd have to rent presumably. And that would be far from easy with no job.
If you could afford the mortgage for at least 12 months, it may make some sense if you feel you might find employment or be able to secure more funding.
It's not ideal, but losing a job is never going to make life easy.

MovingForwards

blue_max_3 said:

hazyjo said:

If I seriously thought I was at risk of losing my job, there's no way I'd be buying.

If you're just covering every scenario in your head and it's unlikely, just exchange and complete on the same day (which is generally what's being advised in this current climate).

But thinking it through, he'd have to rent presumably. And that would be far from easy with no job.
If you could afford the mortgage for at least 12 months, it may make some sense if you feel you might find employment or be able to secure more funding.
It's not ideal, but losing a job is never going to make life easy.

With no job there's benefits to fall back on which pay / contribute to the rent and living expenses in renting.

With no job there's benefits to fall back on which pay / contribute to living expenses when a home owner.
After 9 months it's possible to claim a loan to cover the interest of the mortgage, which is then secured on your home. 
There's no help for the capital repayment element.

CinderKona

Thanks for the answers i suppose the point i was trying to make is I would have enough to tie me over until I got another job.

Crashy_Time

blue_max_3 said:

hazyjo said:

If I seriously thought I was at risk of losing my job, there's no way I'd be buying.

If you're just covering every scenario in your head and it's unlikely, just exchange and complete on the same day (which is generally what's being advised in this current climate).

But thinking it through, he'd have to rent presumably. And that would be far from easy with no job.
If you could afford the mortgage for at least 12 months, it may make some sense if you feel you might find employment or be able to secure more funding.
It's not ideal, but losing a job is never going to make life easy.

But if he is already renting and has tons of savings, and is maybe getting 80% salary until his job prospects are more clear you would agree that jumping straight into negative equity (assuming the lender would even let him) would be pretty idiotic at this stage?

blue_max_3

Crashy_Time said:

blue_max_3 said:

hazyjo said:

If I seriously thought I was at risk of losing my job, there's no way I'd be buying.

If you're just covering every scenario in your head and it's unlikely, just exchange and complete on the same day (which is generally what's being advised in this current climate).

But thinking it through, he'd have to rent presumably. And that would be far from easy with no job.
If you could afford the mortgage for at least 12 months, it may make some sense if you feel you might find employment or be able to secure more funding.
It's not ideal, but losing a job is never going to make life easy.

But if he is already renting and has tons of savings, and is maybe getting 80% salary until his job prospects are more clear you would agree that jumping straight into negative equity (assuming the lender would even let him) would be pretty idiotic at this stage?

By his own admission, prices are falling in his area and he’s agreeing to buy at above market value. That alone is good reason to abort. Be he seems to have accepted that. The actual question was whether he would lose his house between exchange and completion. I’d say most people try to do both on the same day, so this shouldn’t happen. 

pinkteapot

If there’s any risk of job loss and you need a mortgage which was based on the job salary but you’re confident you could still afford your repayments and other bills, then go ahead but exchange and complete on the same day, or with as small a gap as possible.

Mortgage lenders can pull a mortgage offer after exchange, so don’t chance it. Doesn’t matter what changes in your circumstances happen after completion.

Exchange and completion on the same day is not typical in normal times (and usually advised against) but common at the moment.