Losing Job After Mortgage Approval

Monster_Stan91

Hi, I have just found out that my job is at risk following the company I work for coming into financial difficulties. I have just completed a mortgage application and exchanged contracts for a new-build house that we are due to move into in March 2021. If I lose my job, will this effect the mortgage at all as we have already paid the deposit and exchanged contracts? We are using the Help to Buy scheme as well, not sure if this also has any impact? Just looking for some advice really as this is really worrying me at the moment. Thanks in advance.

MWT

If you have already been issued with the formal 'at risk' notice by your employer then the T&C for a lot of lenders would require you to tell them about that even if you have not actually lost your job yet.

Read the agreements you have signed and see what the details say about changes affecting your employment and notification...

If you do lose your job, will you still meet the lenders affordability criteria without your salary?

This is one of the problems with the lengthy delays between exchange and completion on new builds unfortunately.

I hope it all works out for you though.

Monster_Stan91

I haven't been given a formal 'at risk' notice at this point, but there has been a company announcement saying that redundancies may be implemented before the end of the year within my department. As I am relatively new (started here in January) and I am not yet fully qualified within my field, I am concerned that I may be a prime candidate for this.

If I do lose my job, my partner's salary would be sufficient to meet the mortgage repayments each month and the household bills, I'm not sure if this would be a consideration in the affordability check for our mortgage provider.

Thanks for the advice though. I was just wondering whether it would be worth talking to the lender at this stage or wait until I know more.

MWT

Just check the details in what you have signed, it will give you a guide as to when you need to inform your lender.

For example if it merely requires you to inform them of significant changes in your employment status then from what you've said you are not there yet, but if it requires you to inform them if your employer enters into a consultation period then depending on what they have said you may already be there...

The ability to pay the bills on one salary, although clearly a good thing, is not the same as meeting the affordability criteria unfortunately. Just check if your partners salary alone would enable you to borrow the amount you need..

To offer a small ray of hope, although last in, first out is a valid selection criteria, your employer is also obliged to seek volunteers and consider options like offering early retirement and when that involves higher paid staff members than a new starter like yourself, it can enable them to achieve the savings they need from fewer people.

Suseka97

Just to add to the comment regarding your potential job security... I've been in similar situations in my working life and found that employers often sought to get rid of 'dead wood' during times of restructuring and downsizing in headcount.  They would offer voluntary redundancy at more favourable terms than statutory and sometimes early retirement options.  So, just because you are not yet full qualified in your role, doesn't necessarily make you a prime candidate.  It's good to look ahead mind and prepare, but am hoping you don't find yourself in that situation.  Good luck.

allygate

Monster_Stan91 said:

I haven't been given a formal 'at risk' notice at this point, but there has been a company announcement saying that redundancies may be implemented before the end of the year within my department. As I am relatively new (started here in January) and I am not yet fully qualified within my field, I am concerned that I may be a prime candidate for this.
If I do lose my job, my partner's salary would be sufficient to meet the mortgage repayments each month and the household bills, I'm not sure if this would be a consideration in the affordability check for our mortgage provider.
Thanks for the advice though. I was just wondering whether it would be worth talking to the lender at this stage or wait until I know more.

1. Post-offer, if you indicate to your broker or lender that your job is at risk, more likely than not your offer will be pulled. They will have a policy to follow on that and not a lot of leeway. So think hard before taking a step in this direction.

2. If you want a mortgage on your partner's sole income, the affordability will be recalculated based on the same. That calculation may not be in line with what you consider to be affordable.

All said, in your place I would wait to get more concrete information on the future of your role/job at the current employement and not take any hasty decisions yet. Given that you have already exchanged contracts, there's nothing more to lose by waiting at this stage.

All the best.

emma_829

Monster_Stan91 said:

Hi, I have just found out that my job is at risk following the company I work for coming into financial difficulties. I have just completed a mortgage application and exchanged contracts for a new-build house that we are due to move into in March 2021. If I lose my job, will this effect the mortgage at all as we have already paid the deposit and exchanged contracts? We are using the Help to Buy scheme as well, not sure if this also has any impact? Just looking for some advice really as this is really worrying me at the moment. Thanks in advance.

I would also consider having a conversation with your Conveyancer and ask them if any COVID-19 clauses were added to the contract. As there is such a length of time between exchange and completion most developers are adding these clauses as protection for both parties. It means if your mortgage offer is pulled due to a redundancy between exchange and completion you should be able to withdraw and deposit is returned. I am making sure this is in all contracts where there is a long delay for my clients due to the current uncertainty. A mortgage offer can be pulled between exchange and completion even in normal circumstances, but I’d hope that your conveyancer had covered the additional risk due to current times. Whilst still not what you want at least you have some peace of mind you won’t loose your savings. Be aware though that your Conveyancer works for the lender and is under a duty to disclose any change of circumstances. 

[Deleted User]

emma_829 said:

Monster_Stan91 said:

Hi, I have just found out that my job is at risk following the company I work for coming into financial difficulties. I have just completed a mortgage application and exchanged contracts for a new-build house that we are due to move into in March 2021. If I lose my job, will this effect the mortgage at all as we have already paid the deposit and exchanged contracts? We are using the Help to Buy scheme as well, not sure if this also has any impact? Just looking for some advice really as this is really worrying me at the moment. Thanks in advance.

I would also consider having a conversation with your Conveyancer and ask them if any COVID-19 clauses were added to the contract. As there is such a length of time between exchange and completion most developers are adding these clauses as protection for both parties. It means if your mortgage offer is pulled due to a redundancy between exchange and completion you should be able to withdraw and deposit is returned. I am making sure this is in all contracts where there is a long delay for my clients due to the current uncertainty. A mortgage offer can be pulled between exchange and completion even in normal circumstances, but I’d hope that your conveyancer had covered the additional risk due to current times. Whilst still not what you want at least you have some peace of mind you won’t loose your savings. Be aware though that your Conveyancer works for the lender and is under a duty to disclose any change of circumstances. 

Brilliant idea