Mortgage question re redundancy

[jsc15]

Hoping the PH experts can assist on this one please. It might be a non-starter & I can get into more specifics if needed, however at a basic level....

- First time buyer
- Secured a new-build in April with a completion date of Oct, now pushed back to Dec
- Secured a mortgage (3yr fixed rate for 22 years) in April, which expires this month so needs renewed. Payments would have been approx 27% of take-home pay
- Was made redundant since then
- Actively looking for new role, however aware that I might have lower take-home pay (initially), or even still be unemployed in Dec.
- My other expenditure (living costs & bills etc) is minimal & will be manageable
- Main question I've got is....in addition to the deposit (& fees etc) I am now able to comfortably pay the 36 mortgage payments, in advance, for the entirety of the 3-year fixed term. Ahead of me going to the mortgage people for a renewal (and getting laughed out the door), has anyone got experience of this being viable (i.e. on basis I was approved previously, hopefully renewing the same deal, however between jobs but clearly not someone who is a financial risk to them during that 3 years)?

Thanks in advance

NOTE: Edited on 18/10 to remove some £ numbers etc

Edited by jsc15 on Tuesday 18th October 00:47

[rsbmw]

I'm sure Sarnie will be along shortly to offer some professional advice, but this sounds like a non starter. They won't care that you have enough cash to cover 3 out of 22 years payments.

[Sarnie]

rsbmw said:

I'm sure Sarnie will be along shortly to offer some professional advice, but this sounds like a non starter. They won't care that you have enough cash to cover 3 out of 22 years payments.

Correct.

If your mortgage offer expires then you will have to apply again in full..........once you inform them that you have no job, it'll be a straight no, irrespective of how much savings you have.

Once you have a signed employment contract with a new firm, some lenders will begin to consider you again, which is likely to mean a change of lenders........

[Welshbeef]

You have a few choices

1. But another house now to trigger the mortgage and thus avoiding the reapplication

2. Find a new job - you might then be in a position to either simply get a lesser mortgage for the same / similar house and be mortgage free in far fewer than the 22years you quoted. OR a possibility to buy a house £30k more than you'd planned

[Trabi601]

Welshbeef said:

You have a few choices

1. But another house now to trigger the mortgage and thus avoiding the reapplication

2. Find a new job - you might then be in a position to either simply get a lesser mortgage for the same / similar house and be mortgage free in far fewer than the 22years you quoted. OR a possibility to buy a house £30k more than you'd planned

I'm no expert - but 1. sounds fraudulent as I'm sure you are obliged to tell them if circumstances change in such a dramatic way.

[jsc15]

OK thanks all. Appreciate the help. It's the answer I thought was most likely, if not the one I wanted.

I've already given the builder about £4k (in initial deposit & 2% they need for conclusion of missives), & then a further £1k deposit on extras, so my focus is on this same house. Will establish if any of this is refundable if I pull out the sale.

In general I think I've now left things a bit late for alternative property. I'd already told the mortgage company in July about the redundancy but only recently thought of the 3yrs of payments as a possibility. So, hoping that the job situation works out and any issues with salary shortfall can then be minimised with a much bigger deposit.

Thanks again

[chow pan toon]

Trabi601 said:

Welshbeef said:

You have a few choices

1. But another house now to trigger the mortgage and thus avoiding the reapplication

2. Find a new job - you might then be in a position to either simply get a lesser mortgage for the same / similar house and be mortgage free in far fewer than the 22years you quoted. OR a possibility to buy a house £30k more than you'd planned

I'm no expert - but 1. sounds fraudulent as I'm sure you are obliged to tell them if circumstances change in such a dramatic way.

I'd do 1 personally knowing I had 3 years to find another job.

[Welshbeef]

Trabi601 said:

Welshbeef said:

You have a few choices

1. But another house now to trigger the mortgage and thus avoiding the reapplication

2. Find a new job - you might then be in a position to either simply get a lesser mortgage for the same / similar house and be mortgage free in far fewer than the 22years you quoted. OR a possibility to buy a house £30k more than you'd planned

I'm no expert - but 1. sounds fraudulent as I'm sure you are obliged to tell them if circumstances change in such a dramatic way.

How about all those who. Urgently don't have any children but are 12 weeks gone... any dependants sir none. That's the way you play the game.

[Gareth79]

jsc15 said:

I've already given the builder about £4k (in initial deposit & 2% they need for conclusion of missives), & then a further £1k deposit on extras, so my focus is on this same house. Will establish if any of this is refundable if I pull out the sale.

Sounds like Scotland? If you have a solicitor dealing with things I'd call them first to see how tied you are into things, I think if missives haven't concluded you can pull out and only pay their costs?

In E&W the contracts are exchanged and is binding when the deposit is paid and the buyer would (I believe) forfeit the deposit if they pull out, and any further losses, eg. if the developer had to sell at a lower price.

[jsc15]

Yep it's Scotland although I didn't realise there would be any great difference to the England/Wales process. I've already paid the 2% to "conclude missives" but I'll check with them, thanks

[Ozzie Osmond]

Trabi601 said:

Welshbeef said:

You have a few choices

1. Buy another house now to trigger the mortgage and thus avoiding the reapplication

I'm no expert - but 1. sounds fraudulent as I'm sure you are obliged to tell them if circumstances change in such a dramatic way.

If the mortgage application was honest when it was made there is no fraud. However, if the lender has put in wording which says all facts and representations made at the time of application remain correct and true at the time of completion/drawdown there could potentially be an issue somewhere in the future.

I don't think I've ever heard of an individual homebuyer being pursued for mortgage fraud - usually the lender will simply get its money back by selling the house in the event of default on the mortgage repayments.

[Ozzie Osmond]

Ozzie Osmond said:

If the mortgage application was honest when it was made there is no fraud. However, if the lender has put in wording which says all facts and representations made at the time of application remain correct and true at the time of completion/drawdown there could potentially be an issue somewhere in the future (i.e. fraud at the point of drawdown, discovered later).

I don't think I've ever heard of an individual homebuyer being pursued for mortgage fraud - usually the lender will simply get its money back by selling the house in the event of default on the mortgage repayments.