Clarification on expiring offers/MIP/extensions

Anjistar

Hello, may I describe a situation and ask for some knowledgeable feedback, please.

 FTB has a Mortgage in Principle arranged in June, runs out 20th August. They have finally found a house and made an offer. Even if accepted, there is no way it will be completed by the end of the mortgage offer. As the buyer is self-employed but currently salaried, is the BS likely to extend for just a month, or more?

The first tricky bit is that the buyer's current job finishes mid-October, and although it's likely there will be another one after that, it can't at this stage be guaranteed (though they will find something). Will the BS need to to know this?

It appears the buyer has been led to believe that they need to provide three months of future salary when the current offer expires, which will not be possible probably until mid September because of the second tricky bit. I don't know if this is a thing or not, so I'd be grateful if someone could tell me it's nonsense or it's quite normal.

The second tricky bit is that between now and then, the buyer is facing a serious operation and at least a month's (fully paid) sick leave. It will not impact their future health or their current job which is kept for them. Do they need to tell the Mortgage company? And is it likely to affect their offer/extension?

Thank you.

ACG

Its very much lender dependent. 
Was there a broker involved? If so, its worth speaking to them. 

Getting an extension can be quite easy or almost like another full underwrite (providing statements/payslips). 

The being off work for a while could be a problem but it might not be. Some lenders want a payslip showing they are back at work, some dont. But being off sick in itself isnt enough to get the application declined as that would be discrimination. 

kingstreet

Is this an agreement in principle you're talking about or a formal offer? The post contradicts itself.

If it's a formal offer it will usually have an expiry date six months from the date of the valuation, or longer depending on the lender, product and property. For example, some lenders issue offers with a twelve month duration for newbuilds.

Hoenir

MIP is not a mortgage offer. The BS will be extremely interested in the nature of the employment. Fundamental to to the entire application. Lying is not recommended. The consequences are severe and long lasting if detected. 

Anjistar

kingstreet said:

Is this an agreement in principle you're talking about or a formal offer? The post contradicts itself.

If it's a formal offer it will usually have an expiry date six months from the date of the valuation, or longer depending on the lender, product and property. For example, some lenders issue offers with a twelve month duration for newbuilds.

Apologies, all they have at the moment is a mortgage in principle. This has a duration of three months, to August 20th

Anjistar

Hoenir said:

MIP is not a mortgage offer. The BS will be extremely interested in the nature of the employment. Fundamental to to the entire application. Lying is not recommended. The consequences are severe and long lasting if detected. 

There is no intention to lie. The mortgage company are already aware of the buyer's field of work, so I would assume they knew that most jobs in that field are finite and relatively short term when they offered the MIP. The question around this was whether anyone has experience of providers requiring proof of future earnings, rather than the usual 3/6/12 months of past earnings. These were obviously already submitted on first application.

MWT

Anjistar said:

Hoenir said:

MIP is not a mortgage offer. The BS will be extremely interested in the nature of the employment. Fundamental to to the entire application. Lying is not recommended. The consequences are severe and long lasting if detected. 

There is no intention to lie. The mortgage company are already aware of the buyer's field of work, so I would assume they knew that most jobs in that field are finite and relatively short term when they offered the MIP. The question around this was whether anyone has experience of providers requiring proof of future earnings, rather than the usual 3/6/12 months of past earnings. These were obviously already submitted on first application.

If they are working on a short term contract then this would need to be disclosed as part of the full mortgage application, and if this is customary for their field of work then they would probably be expected to provide evidence of a history of such short term contracts.

This is something to discuss with the broker handling their application, and I would hope that it has already been discussed so the broker will have aimed them towards a suitable lender for this nature of work...

Hoenir

Anjistar said:

Hoenir said:

MIP is not a mortgage offer. The BS will be extremely interested in the nature of the employment. Fundamental to to the entire application. Lying is not recommended. The consequences are severe and long lasting if detected. 

There is no intention to lie. The mortgage company are already aware of the buyer's field of work, so I would assume they knew that most jobs in that field are finite and relatively short term when they offered the MIP. 

MIP stands for Mortgage In Principle. There's no offer on the table. Lenders base decisions upon the facts declared at the time of the full application. Does the applicant meet the underwriting criteria set.