Received mortgage offer and exchanged but now on furlough. What will happen to offer?

pinkcloud17

Thrugelmir said:

pinkcloud17 said:

I just have no idea and all of these scenarios are going round my head.

Is the job at risk? A far bigger concern than temporarily being on furlough. Which is also the lenders greater concern. 

No. He is guaranteed to go back on full pay whenever we move to level 3 and his job isn't at risk. He just can't do his job with the current restrictions. If the company lost money they would lose the assistants etc. before managers but even that is unlikely. They would also only do it for underperforming shops but his is performing over budget. 

pinkcloud17

Does anyone know if borrowing is reduced how they assess how much to reduce it? I originally thought I would just enter his salary as 80% to see how much they lend based on that. But have been told this isn't what they do?

pinkcloud17

K_S said:

@pinkcloud17 The case is likely to go to manual review. Where an applicant is on furlough, Barclays may consider 80% of basic income up to £30k of annual income. Any 'top-up' may be considered as additional income. Given the part-furlough circumstances described, it is likely that the max borrowing will be recalculated downwards on the basis of your husband's pay under furlough.

Hi, sorry to come back to this again but just reading over the responses again after speaking to my own mortgage advisor and I just wanted to check if what you have said here (i.e. "Barclays may consider 80% of basic income up to £30k of annual income") is the actual published criteria on Barclays website?

I've figured out that if Barclays recalculate it based on the 80% we can probably make up the extra deposit needed with a gift from my Mum. However, if Barclays say the furlough pay is considered as zero we are screwed.

The reason why I'm asking again is because I spoke to my mortgage advisor again and she is being really vague about Barclays criteria. She says they might consider the 80%, they might not. She said it will probably be assessed on individual circumstances and it depends on the job role etc. I'm wondering if she is saying that because of the "might" in the wording you have used here. However, I queried this with Barclays myself (but just said I was thinking of applying for a mortgage) and they said they are taking the 80% furlough into account in all cases. 

K_S

@pinkcloud17 I spent a few hours last week researching part-furlough criteria with lenders for a client. It's a whole mix of approaches, these rules change regularly and it's often with the caveat of manual review. For Barclays afaik, it's 100% of earned income plus 80% of furlough pay subject to a ceiling.

The person at Barclays you spoke to can give a straight answer because they're just a faceless person at other end of the phone who you will never talk to again. It's nothing to them if your case is declined at manual review. It's harder for your broker to assure you of an outcome, especially in the current environment.

I hope that helps in some way!