Furlough - should I inform the lender now or wait until I have more information?

pinkcloud17

I have a mortgage offer in place, exchanged contracts, but since been furloughed. It is a new build property so completion is not until March (estimation only).
I understand that I must inform the lender and I will do this before completion. The question is, when is the right time? Currently, I have no return to work date and no confirmed completion date.

The furloughing started in December, and I intended to inform the lender in January as it was originally meant to be 3 weeks only and has now been extended. However, broker is saying do not inform them until we have either a return to work date, or a confirmed completion date so we have something to work with. Otherwise, she says it is more likely offer will just be pulled. 

With completion not being until March, we may get a return to work date in the coming weeks, or it is also very likely that build will be delayed which would give us more time. However, to make matters worse, the mortgage offer also expires end of March.

I'm worried that if I don't inform the lender quickly they could hold that against us, or we could be left with no time to sort out the situation by the time we hear their decision. However, I'm also worried that  by informing them now with such limited information we could be putting ourselves in a worse situation, when it is possible I could return to work before completion, or at least get a date that they would be more satisfied with. Saying that, with the way things are looking, the end of lockdown does not look to be in sight.

I'm hoping that in worst case scenario they will reduce the lending in accordance with the 80% and they do not withdraw the offer. 

AAGG1234

Sorry to hear your predicament. If you do inform lender, more than likely they will reduce your borrowing and likelihood they would want some further clarifications before reissuing mortgage offer. I would say go with your broker advice on this personally and wait until you know exactly what is happening. 

Thrugelmir

Did your solicitor include a long stop in the contract? Presumably the objective is to beat the stamp duty holiday deadline at the end of March.

Current legislation for lockdown runs until the 31st March. Is your employer likely to require employees before then. 

pinkcloud17

Thrugelmir said:

Did your solicitor include a long stop in the contract? Presumably the objective is to beat the stamp duty holiday deadline at the end of March.

Current legislation for lockdown runs until the 31st March. Is your employer likely to require employees before then. 

No the builders didn't allow any clauses to be amended in the contract. Yes we are aiming for end of March because of the stamp duty holiday and also help to buy runs out 31st March. The build is supposed to be completed by the last week of March, but I have doubts it will be completed by then and we will need to apply for a mortgage extension anyway. Going back to work depends on when the government lift the restrictions, so it really depends on when lockdown ends. Whenever lockdown ends I am guaranteed to go back. 

MovingForwards

Same as what you were told before:

https://forums.moneysavingexpert.com/discussion/6227090/received-mortgage-offer-and-exchanged-but-now-on-furlough-what-will-happen-to-offer/p1

pinkcloud17

MovingForwards said:

Same as what you were told before:

https://forums.moneysavingexpert.com/discussion/6227090/received-mortgage-offer-and-exchanged-but-now-on-furlough-what-will-happen-to-offer/p1

This was a different question, that thread is all about what would happen to the offer, but now I'm asking specifically when I should inform the lender.

Thrugelmir

In line with the declaration that you sign when applying for the mortgage. You agree to inform the lender of any changes in your circumstances from those declared on the application form. Unfortunately people rarely read the small print of what they are contractually agreeing too. Bottom line is that it is your deposit at risk, along with a potential claim for other costs from the developer if you fail to complete. Better to work with your lender than intentionally potentially defraud. As when it does wrong (albeit rarely) the consequences can be far reaching. Financial relationships are built on trust. Break the trust, there can be no relationship. 

pinkcloud17

Thrugelmir said:

In line with the declaration that you sign when applying for the mortgage. You agree to inform the lender of any changes in your circumstances from those declared on the application form. Unfortunately people rarely read the small print of what they are contractually agreeing too. Bottom line is that it is your deposit at risk, along with a potential claim for other costs from the developer if you fail to complete. Better to work with your lender than intentionally potentially defraud. As when it does wrong (albeit rarely) the consequences can be far reaching. Financial relationships are built on trust. Break the trust, there can be no relationship. 

Thanks. I appreciate this and I have no intentions of not telling the lender. However I'm considering withholding the information until nearer completion when I may have a return to work date or at least know the completion date. Is that still fraud? Or could it still breakdown the relationship? What I don't want to do is wait to tell them and then they withdraw the offer because we didn't tell them immediately. But I would just rather wait a while until there is more certainty about this situation.

MWT

Are you both furloughed at the moment?

Your original thread said it was your husband, this thread says it is you?

pinkcloud17

MWT said:

Are you both furloughed at the moment?

Your original thread said it was your husband, this thread says it is you?

No just him, I just wrote it as if I was him here for some reason

ACG

You have a duty to tell the lender, but I dont think there is anything to say when you should tell them other than before you complete. By holding off you are buying yourself some time for the situation to work itself out. I do not use Barclays, I hate using them so have no idea what their process is. 

I would be more concerned about the builder than I would the lender. If you cant complete, where does that leave your deposit?