Put on furlough after receiving mortgage offer, but before exchange/completion

SB1990

Does anyone have experience of this? We got out mortgage offer on 22nd December 2020 when both of us were on normal working hours and wages. My other half had been on furlough earlier in the year and was coming towards the end of it at the time of our mortgage application - the lender wanted a letter from his work to confirm he'd be returning to his normal wages and payslips to back this up which was all fine. Since the new year and seeing as we have now gone into lockdown again, his work have decided to make the most of the furlough scheme again seeing as its still open and so he has been placed back on partial furlough until March earliest. We are at least a couple months off from exchange and completion so what do we do? Do we keep quiet about it and just wait for exchange and completion as normal or is there a chance the lender will be in touch and want any further follow up information to check for any change in circumstances before we exchange? If we do tell them he has been placed back on partial furlough regardless, what is likely to happen to our mortgage offer? The process is already lagging behind and don't want to add to any delays so our buyers or sellers get annoyed. 

K_S

SB1990 said:

If we do tell them he has been placed back on partial furlough regardless, what is likely to happen to our mortgage offer?

@SB1990 Depending on the policy of the lender and the affordability numbers one of the following will happen -

- the lender recalculates the affordability based on current income, it's still affordable, so no change

- the lender recalculates the affordability and revises the offer downwards

- the offer is pulled

anewbuyer

I had a similar situation but my partner's furlough was covering 100% of her wages. We were very worried but we had to inform the broker as her industry is one of those hot-spots for the lockdowns, in the end, the bank wanted to assure that she would keep her job, they seemed content when they learnt that the employer was topping up the furlough salary.

The bank didn't request again our payslips or bank statements other than very early in the process before the pandemic, I do not want to advise you anything that would put your purchase at risk, but that is our experience.

Thrugelmir

SB1990 said:

Since the new year and seeing as we have now gone into lockdown again, his work have decided to make the most of the furlough scheme again seeing as its still open and so he has been placed back on partial furlough until March earliest. We are at least a couple months off from exchange and completion so what do we do? 

You need to consider this from a personal perspective as well. You know the employer. What's the stability of the business like. A business would prefer not to partially furlough employees. As this in itself suggests a downturn in trade. Furlough is far from a cost free option for the employer either. You can always move at a later date. 

SB1990

K_S said:

SB1990 said:

If we do tell them he has been placed back on partial furlough regardless, what is likely to happen to our mortgage offer?

@SB1990 Depending on the policy of the lender and the affordability numbers one of the following will happen -

- the lender recalculates the affordability based on current income, it's still affordable, so no change

- the lender recalculates the affordability and revises the offer downwards

- the offer is pulled

When the lender recalculates is it like a whole new mortgage application again or will it remain the same application with the underwriter just making the necessary amends?

Also we are with Natwest - do you know what their likely outcome is? It’s only partial furlough and there is literally barely a difference in take home pay. 

SB1990

Thrugelmir said:

SB1990 said:

Since the new year and seeing as we have now gone into lockdown again, his work have decided to make the most of the furlough scheme again seeing as its still open and so he has been placed back on partial furlough until March earliest. We are at least a couple months off from exchange and completion so what do we do? 

You need to consider this from a personal perspective as well. You know the employer. What's the stability of the business like. A business would prefer not to partially furlough employees. As this in itself suggests a downturn in trade. Furlough is far from a cost free option for the employer either. You can always move at a later date. 

From a personal perspective we have no worries about the furlough, the employer is stable and by their own admission are simply making the most of the scheme again because the help is there to take - even though it’s not cost free it is a big saving for a small/medium company. We don’t just want to postpone and move at a later date either, there is a barely a salary difference so we have no worries from our own point of view, and we have a chain either side so don’t want to lose our buyer, regardless looking at our timeline it’s likely we would compete around the time he comes off furlough anyway. 

K_S

SB1990 said:

K_S said:

SB1990 said:

If we do tell them he has been placed back on partial furlough regardless, what is likely to happen to our mortgage offer?

@SB1990 Depending on the policy of the lender and the affordability numbers one of the following will happen -

- the lender recalculates the affordability based on current income, it's still affordable, so no change

- the lender recalculates the affordability and revises the offer downwards

- the offer is pulled

When the lender recalculates is it like a whole new mortgage application again or will it remain the same application with the underwriter just making the necessary amends?
Also we are with Natwest - do you know what their likely outcome is? It’s only partial furlough and there is literally barely a difference in take home pay. 

@SB1990 Natwest's published policy re furlough is to not accept applications from customers on furlough until they've restarted and can evidence it with one month of non-furlough payslip. I haven't placed any customers on partial-furlough with Natwest so can't say if their policy is any different in that scenario.