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

MWT

I would suggest that first and foremost you follow your brokers advice.

Right now you appear to have a the firm belief that your husband will be returning to work on full salary as soon as the Covid regulation allow his place of work to open and that his job is not at risk.

As long as you both have that belief I would suggest there is no intent to defraud.

The problems dates are, a confirmed completion date and the expiration of your offer. Doesn't seem to be much more you can do at the moment, but obviously the closer those two are without a return to work date the less time there is to resolve a problem with the mortgage, and the more risk there is to your deposit if you are unable to complete. 

Carl2510

I think then biggest problem here is does the OP know they will most likely lose there deposit due to already exchanging if they don’t go ahead with the sale.

not sure how it works with Help to Buy if your still expected to put down a deposit once exchanged.

Thrugelmir

pinkcloud17 said:

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.

Only you can make that decision, the risk is all yours. Likewise how secure your husbands job is in the longer term. Furlough is a sticking plaster that well only minimise job losses not stop them altogether. 

pinkcloud17

Thanks all.
Yeah I am aware if I don't complete then a lot of money is at risk: my deposit, my deposit I have paid for extras for the house, all of my legal fees and also, in worst case scenario, my solicitor warned me (at the very beginning when there was concerns I may not be able to complete if the build is delayed and I can no longer receive help to buy), I could be sued by the builders.
I need to do anything I can to secure this mortgage. However, even though my broker has even hinted at this, I definitely would not complete without ever telling the lender he is on furlough as I understand the implications could be far worse.
I just need to figure out if I should tell them now so we know what is happening and can try to sort something out e.g. if there is a chance to increase the deposit rather than the offer being outright withdrawn. Or wait to see if the situation improves at all in the time remaining before completion so we can present a better case to the lender.
At the moment I'm leaning towards the latter with the help of all of your advice and what the broker is saying. However, I feel the lockdown situation is probably not going to improve any time soon so we could just be wasting time not telling them. It is difficult. At the moment I'm thinking we wait until the start of February and see if there is any movement at all on restrictions lifting, or if there are any updates on a completion date as I feel the completion date will probably be delayed.
We also need to think about if the lender reduces lending and we decided to go ahead and increase the deposit, there is also a chance the build could also be delayed and we therefore would then be liable for land and buildings tax also which is an additional expense.

pinkcloud17

ACG said:

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? 

Thanks. See above re the deposit. 
Just out of interest, why do you hate using Barclays?
I don't know anything about them, but from the research I have done myself they seem to be one of the very few lenders at the moment who are counting the 80% furlough so I'm holding onto that hope.

Thrugelmir

pinkcloud17 said:

my solicitor warned me (at the very beginning when there was concerns I may not be able to complete if the build is delayed and I can no longer receive help to buy), I could be sued by the builders.

That's why a long stop date should be in the contract. Enabling you to walk away if need be. 

pinkcloud17

Thrugelmir said:

pinkcloud17 said:

my solicitor warned me (at the very beginning when there was concerns I may not be able to complete if the build is delayed and I can no longer receive help to buy), I could be sued by the builders.

That's why a long stop date should be in the contract. Enabling you to walk away if need be. 

The solicitor said if we did that they wouldn't accept it and would give the reservation to someone else. He said builders contracts are notoriously inflexible and do not allow you to deviate from their terms. 

MWT

Thrugelmir said:

That's why a long stop date should be in the contract. Enabling you to walk away if need be. 

Sadly, when builders have no problems finding multiple potential buyers for most plots there is no incentive for them to agree to any contract changes...

Thrugelmir

MWT said:

Thrugelmir said:

That's why a long stop date should be in the contract. Enabling you to walk away if need be. 

Sadly, when builders have no problems finding multiple potential buyers for most plots there is no incentive for them to agree to any contract changes...

Nobody is holding a gun to someone's head and forcing them to sign on the dotted line.  If there's no back up plan then one has to accept the risk. All one needs to do is be as bloody minded as the developer. Negotiate hard. 

MWT

Thrugelmir said:

Nobody is holding a gun to someone's head and forcing them to sign on the dotted line.  If there's no back up plan then one has to accept the risk. All one needs to do is be as bloody minded as the developer. Negotiate hard. 

The 'gun' for a number of people has been the changes in 'Help to Buy', but yes, the OP knows the risk.

Unless the developer feels they have problems finding buyers there really isn't much the FTB can do to 'negotiate hard' though, it is a sellers market on a lot of these new developments.