COVID HTB Issues

London68164

Hi All,
I'm just after a bit of advice really. My partner and I had reserved a new build prior to COVID using the HTB scheme and had a mortgage offer ready to go for exchange but the pandemic struck. The build was then stopped and completion window moved from initially Aug-Sep 20 to Jan-Feb 21. Unfortunately my partner has been furloughed and this mortgage offer has since expired. We therefore haven't exchanged and will be unable to do so without a mortgage offer. We are trying to arrange for another mortgage offer but despite being way under the possible affordability threshold of our mortgage (even taking into account my partner's furlough salary) our lender is insisting on a letter from their company to explicitly state that they will be returning to work after the furlough scheme ends in October. Apparently they are viewing the furlough scheme as a 'temporary employment' and therefore need evidence of that they will be bringing people back to work when the scheme finishes. The company is in events which has been very badly hit by the virus and have given very little indication as to whether they will bring back staff in October or start making redundancies. Apparently even if we were to reapply with another lender, they would also require this letter of confirmation. This is despite one salary able to cover the mortgage payments and even the possibility of putting down more than a 5% deposit. I am doubtful that my partner will be able to get this letter because the company doesn't appear to have made many decisions r.e. their staff and the furlough scheme as of yet and therefore without this we are currently unable to get a mortgage offer. Without this we are unable to exchange contracts. So the new build we have been waiting for over a year to be ready and which was delayed because of the virus, is now apparently in danger of falling through completely?

I wondered if anyone might be in a similar position and had any advice on how to proceed? Thanks for your help!

bradders1983

Mortgage companies have put in many measures since March. 90% mortgages have all but vanished, some of the ones that are left have terms on them proving that the deposit isnt a loan from a third party, other lenders are not lending to furloughed people. Lenders are becoming more adverse to risk and you cant blame them to be honest.

All you can really do is jump through the hoops or put off lending a) totally, or b) until the market improves. There is little else you can do tbh.

MovingForwards

Can you borrow enough on one income? If so, go for sole mortgage then remortgage in a few years when your OH is settled back into work.

What has your broker suggested?

gettingtheresometime

MovingForwards said:

Can you borrow enough on one income? If so, go for sole mortgage then remortgage in a few years when your OH is settled back into work.

What has your broker suggested?

Wouldn't the house then have to be bought solely in the name of who was on the mortgage?

Thrugelmir

If the house falls through then it does. Little point in worrying. There'll be others to buy. Keep on saving and building your deposit. Not buying now might even be financially in your favour as events in the future unfold.