Fiance will be furloughed, I am key worker, mortgage just approved... should we pull out? 31 October 2020 at 6:50PM in Mortgages & Endowments 21 replies 2K views

FTBMish

Lockdown 2..... 
I earn 36680 and won't be impacted by the lockdown, my fiance earns 27000 which will reduce by 1/3 due to the industry he works in closing so he will be on the new job support scheme. 
Our mortgage with Santander has just been approved however am I right in thinking it is likely to be pulled due to the furlough? (Furlough being an automatic decline?)  They are aware he was furloughed before and went back to work in July. 
My worry is if we don't pull out, the house will be finished and we will lose the mortgage but be financially liable. 
The mortgage we had approved was 3.3 times our combined  salaries. With his drop in income that would need to be 3.85 times our combined salaries. 
Do you think its safest to pull out? No idea what is for the best

gwynlas

Can you afford morgage payments and bills?  If so why pull out?

grumiofoundation

Do you still want, and feel financially secure, to buy the house? 

You will need to inform lender of furlough - before pulling out why not see what they say (and speak to broker first if you are using one)? 

I assume you haven’t exchanged - until then you won’t be financially liable for house. 

GrumpyDil

Key question is have you exchanged. 

FTBMish

gwynlas said:

Can you afford morgage payments and bills?  If so why pull out?

Yes we can. The mortgage payment is only £103.89 per month more than we pay now in rent.
No other debts to pay, just car lease and finance which was already accounted for.
I was under the impression that furlough would mean it would be pulled anyway. Perhaps I am wrong this is my first time buying and this whole scenario is odd isn't it

FTBMish

GrumpyDil said:

Key question is have you exchanged. 

No. At this point only had the offer accepted a few days ago

FTBMish

grumiofoundation said:

Do you still want, and feel financially secure, to buy the house? 

You will need to inform lender of furlough - before pulling out why not see what they say (and speak to broker first if you are using one)? 

I assume you haven’t exchanged - until then you won’t be financially liable for house. 

I will email the broker! Haven’t exchanged, no. 
Keeping fingers crossed. 

GrumpyDil

Good you have not exchanged as that would have been a problem.
Hopefully broker will be able to offer some help although it is possible you won't meet the lending criteria based on your new situation. At least if you confirm that is the case you can decide to stop any activity by your solicitor which would incur additional costs. 

Sibbers123

Ask for exchange and completion on the same day to take the risk out of it. It’s very risky if you don’t do this.

You’ll have to inform the lender of the change in circumstances.

Densol

Am I right in thinking this is a new house ? I see these as danger areas because unlike buying a second hand house whereby you can exchange and complete on the same day, the builder will require an exchange possibly well before completion. In fact depending on the build, it may only contain a long stop date ( latest date completion must take place ) 
So you would effectively exchange, hand over your 10% deposit, and then wait at the mercy of Covid and the Gov for whatever damage happens to the economy and your jobs. Personally its a worry I would not want to sit on that could take months if the house is in its early stages. 

Any change from application, through to offer, through to completion should be notified to the lender and they COULD pull the mortgage offer. Hence the strategy to exchange / complete same day. 

FTBMish

Densol said:

Am I right in thinking this is a new house ? I see these as danger areas because unlike buying a second hand house whereby you can exchange and complete on the same day, the builder will require an exchange possibly well before completion. In fact depending on the build, it may only contain a long stop date ( latest date completion must take place ) 
So you would effectively exchange, hand over your 10% deposit, and then wait at the mercy of Covid and the Gov for whatever damage happens to the economy and your jobs. Personally its a worry I would not want to sit on that could take months if the house is in its early stages. 

Any change from application, through to offer, through to completion should be notified to the lender and they COULD pull the mortgage offer. Hence the strategy to exchange / complete same day. 

The house has been built however the internal things need completing (kitchen we chose, carpets, flooring etc). My job won't be affected but my fiance would lose 20% salary so we can still afford the mortgage because we are asking for less than 4 times our combined salaries. I have emailed the broker however for advice but I appreciate this is new to brokers too!