Moving / buying a new house whilst unemployed

aalleexx

I am looking to move home however what I see as a problem is that currently I am not working although I do have savings which will last for some time to cover the mortgage. My concern is that when I engage my mortgage company to start the process of porting the fact that I am not working  may raise a few red flags. I am looking to down grade into a property that is valued at less than my current one. In light of this my current plan would be to inform the mortgage company of the change in property and to  keep paying the rate I am currently paying , which is a low monthly amount.

 

Ultimately, I am looking to see what people have done and what their experiences have been in similar circumstance.

 

Thank you

Irishpearce26

This is a tricky one as im pretty sure you are suppose to let your lender know a change in circumstances. Do you plan to port your mortgage and borrow more? If its just to port existing mortgage they wont need to do anything other than agree to switching it over as long as your product is portable. However if the house is valued lower than what you owe any equity from the sale of your property would likely go to pay off the difference in your current mortgage. That's just assuming what i know from porting my current mortgage recently.

pinkteapot

Once you've got a mortgage there's no requirement to tell your lender if circumstances change*. 

However, if you want to move you apply for a new mortgage (even if you're porting) and I don't know how you'd get one without an income...

* For any buyers reading: By "got a mortgage" I mean after you've completed your purchase and the mortgage has actually started - between application and completion you absolutely must advise of them of changes in circumstances.

davidmcn

As above, "porting" is generally dealt with similarly to any other mortgage application, so they'll be checking affordability. Being on the dole is very likely to be a red flag!

custardly

Speak to a mortgage adviser, depending on how much savings you have you 'might' be able to borrow against your savings / pension pot. Very big might though! My brother borrowed approx. £200,000 against his S&S ISA, which was approx. £600,000

greatcrested

Irishpearce26 said:

This is a tricky one as im pretty sure you are suppose to let your lender know a change in circumstances.....

I'm 100% sure you're not supposed to.

Applying for a new mortgage, on a new property, as here, is anothe matter. As David says, the lender will look at affordability based on income.

lookstraightahead

Yes because it's all to do with risk and affordability from a lender's perspective.

Irishpearce26

I think I've confused this with the application process which states that if anything changes you need to let them know i.e. furlough, unemployment, house price. I guess when you have the mortgage they just want you to pay on time.

cattie

When I was looking to move some years ago & unable to work due to health reasons, I approached my lender (Halifax) & explained that I was not looking to borrow any more than my existing mortgage, that I had a healthy financial cushion behind me & that they could see from their records that I'd never missed or been behind with payments on my mortgage. It was put in front of their underwriters & shortly after I heard that my new mortgage was approved.

trex227

cattie said:

When I was looking to move some years ago & unable to work due to health reasons, I approached my lender (Halifax) & explained that I was not looking to borrow any more than my existing mortgage, that I had a healthy financial cushion behind me & that they could see from their records that I'd never missed or been behind with payments on my mortgage. It was put in front of their underwriters & shortly after I heard that my new mortgage was approved.

When was that? As if it was pre when the stricter regulations on mortgage lending came in (2014 I think?), then it might not apply now

aalleexx

Irishpearce26 said:

This is a tricky one as im pretty sure you are suppose to let your lender know a change in circumstances. Do you plan to port your mortgage and borrow more? If its just to port existing mortgage they wont need to do anything other than agree to switching it over as long as your product is portable. However if the house is valued lower than what you owe any equity from the sale of your property would likely go to pay off the difference in your current mortgage. That's just assuming what i know from porting my current mortgage recently.

Hi Thanks for your comments . I`m not planning to borrow more i`m planning to move to a house with less value