Buying a house, but may lose job!

Rose1000

Hi All, I am in the process of buying a house with my husband. We were approved in principle - found the house of our dreams in Wicklow have had the valuation done and are just waiting on the contracts and for the bank to send out formal loan offer. However my boss announced to us last Friday that they are planning on announcing redundancies next week!! I am now terrified that we are going to lose the house. I know that we would be well able to make the mortgage repayments on my husbands salary alone - but I am worried about the formal loan offer from the bank now. Has anyone ever been in this situation before? The bank has documentation from both mine and my husbands employers stating that we are in full time permanent employment - are they going to ask for these documents again before going ahead with formal loan offer?

Woshy

What bank is it with? We have our mortgage with ebs and they didn't ask for us to provide anything more when getting our official loan offer - they used what we provided for the approval in principle. We did apply for the formal loan offer a few days after we got the aip though because we found a house quickly.

Whether you're obliged to tell them if you lose your job before you sign the papers, I'm not sure.

Woodville56

What if you sign the Contract for Sale on the property and the lender subsequently "discovers " your possibly reduced financial circumstances and refuses or reduces mortgage available to you ? You will have entered into an enforceable legal contract with the vendor and have no guarantee that the mortgage is forthcoming ? Whatever the consequences, I would come clean with your lender if the redundancy happens - hopefully will not arise for you. Did you ask the advice of your conveyancing solicitor on your situation ?
In our mortgage application process, our bank sought updated financials before letter of offer issued, but that was some months after Approval in Principal received. I wouldn't risk signing the Contract for Sale until you were sure the funds were ready for drawdown.

Little Miss Cutie

Woodville56 wrote: »

You will have entered into an enforceable legal contract with the vendor and have no guarantee that the mortgage is forthcoming ?

Is there not a standard cavet in contract "subject to mortgage"? My memory is hazy considering we only bought a couple of months ago but I am sure our solicitor told us when we signed contracts the only way out of the contract was the mortgage not being granted.

At that point our mortgage had been issued so wasn't too focused on the issue.

ABajaninCork

I wouldn't panic just yet. You haven't been told anything other that there will be redundancies. As I understand it from your OP the numbers haven't been announced as yet, neither have you been told that your position will be affected.

Unless and until you're told otherwise, I wouldn't be doing anything just yet. Once that happens seek advice from your solicitor. That's what you pay them for!

Lux23

This happened to a girl I worked with when I lost my job in 2010, there was a massive rake of redundancies announced and she had to wait a month until she knew if her job was safe or not. She gave up on the application and then found out her job was safe all along. If I was you, see if you can stall a little until you know what is going to happen.

Woodville56

Little Miss Cutie wrote: »

Is there not a standard cavet in contract "subject to mortgage"? My memory is hazy considering we only bought a couple of months ago but I am sure our solicitor told us when we signed contracts the only way out of the contract was the mortgage not being granted.

At that point our mortgage had been issued so wasn't too focused on the issue.

Looking back now, yes there was a " subject to mortgage" clause in our contract. To OP. just make sure it's in your's in case difficulty with mortgage arises . Hopefully you won't need to invoke it. Personally though, in the event of a redundancy , I would be reluctant to proceed without updated bank approval based on your changed financials.

Triceratops Ballet

Don't panic until you know if you are in trouble, I wouldn't disclose this to the bank unless you have to. I pulled out of a mortgage offer from kbc a couple of years ago upon being made redundant, even though I could have afforded the payments on JSB, they looked for further payslips and a confirmation letter from work, which I couldn't give so I had to pull out.

In terms of the bank looking for updated info, I got my loan offer there last week and in it was stipulated that I had to submit an updated salary cert most recent payslip and bank statements, that was with BOI so it's possible they could ask you for more info.

Brego888

I changed jobs just after going sale agreed. Didn't mention anything to the bank.

paulers06

We're in a similar situation, my partner might be getting made redundant this week.

We have our loan offer and are just waiting to close the sale in the next couple of weeks. Contract is signed. We are both satisfied that we will be able to afford the mortgage payments on my salary if it comes down to it. because of this, we have no intention of telling the bank.

Get all of your paperwork in order before the redundancy - most importantly your salary cert signed by your employer. It will at least keep your options open

JimsAlterEgo

Isnt this close to Fraud, if not actually is? Dont you have to sign documents later in the process to the effect that all infomation provided is truthful? I would also be concerned about using a solicitor who would ignore this.

f3232

JimsAlterEgo wrote: »

Isnt this close to Fraud, if not actually is? Dont you have to sign documents later in the process to the effect that all infomation provided is truthful? I would also be concerned about using a solicitor who would ignore this.

No its not fraud or close to it. At the time of application the OP is in a job, with the threat of redundancy only. She may not be made redundant. Nothing got to do with the bank.

All information at the point of signing the contract would be true.

The decision as to whether to get the mortgage application is a financial one only, nothing to do with fraud.

Balmed Out

Rose1000 wrote: »

I know that we would be well able to make the mortgage repayments on my husbands salary alone

If that's true you were getting a mortgage well below what ye're income was and will still get mortgage approval.

If your not taking into account possibility of children, home repairs, property taxes, utilities, home/garden/estate maintenance etc etc then you really should delay until you find out your employment position and step back if you need to get a new job (unless in a field where its easy to get a new job at similar pay?)

MouseTail

I see no reason to inform the Bank, or solicitor for that matter.

JimsAlterEgo

f3232 wrote: »

No its not fraud or close to it. At the time of application the OP is in a job, with the threat of redundancy only. She may not be made redundant. Nothing got to do with the bank.

All information at the point of signing the contract would be true.

The decision as to whether to get the mortgage application is a financial one only, nothing to do with fraud.

Depends on what you sign might be certifying, also I seem to recall some banks close to drawdown ring the employers to confirm details (I believe you dign something to say this is ok).

If you knowingly sign something that you know is incorrect, IMO this is dodgy.

f3232

JimsAlterEgo wrote: »

Depends on what you sign might be certifying, also I seem to recall some banks close to drawdown ring the employers to confirm details (I believe you dign something to say this is ok).

If you knowingly sign something that you know is incorrect, IMO this is dodgy.

No they ring before issuing a loan offer, not at time of drawdown, if they ring at all. A broker will confirm this.

Also if the person is in her job on signing then she is not being dodgy in any way. The overall morality is up to the OP anyway, having considered all issues involved.

runawaybishop

Rose1000 wrote: »

Hi All, I am in the process of buying a house with my husband. We were approved in principle - found the house of our dreams in Wicklow have had the valuation done and are just waiting on the contracts and for the bank to send out formal loan offer. However my boss announced to us last Friday that they are planning on announcing redundancies next week!! I am now terrified that we are going to lose the house. I know that we would be well able to make the mortgage repayments on my husbands salary alone - but I am worried about the formal loan offer from the bank now. Has anyone ever been in this situation before? The bank has documentation from both mine and my husbands employers stating that we are in full time permanent employment - are they going to ask for these documents again before going ahead with formal loan offer?

Losing the house isn't a big deal, losing your job and struggling financially because your mortgage exceeds what you can repay is though. You say you can make the mortgage repayments on the one salary but are you sure you are accounting for all the insurances that go along with it and how much margin are you leaving yourself?

JimsAlterEgo

f3232 wrote: »

No they ring before issuing a loan offer, not at time of drawdown, if they ring at all. A broker will confirm this.

Also if the person is in her job on signing then she is not being dodgy in any way. The overall morality is up to the OP anyway, having considered all issues involved.

http://www.boards.ie/vbulletin/showpost.php?p=91632853&postcount=11

not according to this person

I do know that KBC, while not requesting documentation in addition to what was sent in in the earlier stages of the application, absolutely called my place of employment to confirm my current status before the loan drawdown.

They may not request documentation from you - but they can make a phone call incredibly quickly and easily. I would be wary of lying in this situation.

Not sure if all banks woudl do a follow up call but to me it makes sense

Woodville56

I would suggest getting advice from your solicitor if your redundancy happens before you sign contracts

Beaner1

Call the bank and tell them. It's for your own benefit.

Please don't come back in in 5 years time saying the bank were throwing money at you and they didn't evaluate the risk properly and please I want a mortgage write down because my husband has had is income fall.

f3232

Beaner1 wrote: »

Call the bank and tell them. It's for your own benefit.

Please don't come back in in 5 years time saying the bank were throwing money at you and they didn't evaluate the risk properly and please I want a mortgage write down because my husband has had is income fall.

If you can afford a mortgage on one income and your happy to take the risk forgot the begrudges and do it.

Sure you both could loose your jobs, the sky could fall in, etc. Then again, you might not be made redundant or if you are you could end up getting a better job.

f3232

JimsAlterEgo wrote: »

http://www.boards.ie/vbulletin/showpost.php?p=91632853&postcount=11

not according to this person

I assume the person would still be in employment if KBC rang. The employer (human resource department)would not mention the threat of redundancy I assume.

JimsAlterEgo

f3232 wrote: »

I assume the person would still be in employment if KBC rang. The employer (human resource department)would not mention the threat of redundancy I assume.

I would say they would have to and if the bank is clever enough it would be
asking the correct questions.
What if they had been made redundant since.

f3232

JimsAlterEgo wrote: »

I would say they would have to and if the bank is clever enough it would be
asking the correct questions.
What if they had been made redundant since.

Don't be daft, any member of a management team/personal department who gives out sensitive information like potential redundancies would be fired on the spot.

The bank has a right to ask if information on the salary cert is correct, nothing more.

What if they had been made redundant since.

Worst thing that can happen- the loan offer is rejected on the basis that they are no longer in employment. if the OP is willing to take that risk- then take the risk.

JimsAlterEgo

f3232 wrote: »

Don't be daft, any member of a management team/personal department who gives out sensitive information like potential redundancies would be fired on the spot.

The bank has a right to ask if information on the salary cert is correct, nothing more.


Worst thing that can happen- the loan offer is rejected on the basis that they are no longer in employment. if the OP is willing to take that risk- then take the risk.

I am speaking about a scenario where a person has either accepted, been selected for or actually been made redundant not where are potential redundancies. In that case HR would IMO have to disclose that.

The bank has a right to ask for whaever you give them permission to.

f3232

JimsAlterEgo wrote: »

I am speaking about a scenario where a person has either accepted, been selected for or actually been made redundant not where are potential redundancies. In that case HR would IMO have to disclose that.

A HR department does not have to disclose anything to anyone. A company does not have any obligation to a bank in these issues.

JimsAlterEgo wrote: »

The bank has a right to ask for whaever you give them permission to.

Yes but the HR department does not have to answer these questions. In fact when it comes to something like potential redundencies, it would be stupid for them to do so.

rgmmg

You may be made redundant but may not (hopefully the latter ).

I have no direct knowledge tbh but if you're made redundant it would be a material change in circumstances and I guess you would have to disclose that to the lender.

JimsAlterEgo

f3232 wrote: »

A HR department does not have to disclose anything to anyone. A company does not have any obligation to a bank in these issues.



Yes but the HR department does not have to answer these questions. In fact when it comes to something like potential redundencies, it would be stupid for them to do so.

Do you really think a bank will process the application any further if the HR department refused? Alarm bells would be going off.

JimsAlterEgo

JimsAlterEgo wrote: »

Do you really think a bank will process the application any further if the HR department refused? Alarm bells would be going off.

A HR department would be hung out to dry if they gave away any sensitive information. They could also refuse to disclose any info if they wished, it would be will within in their rights to not discuss an employee.

JimsAlterEgo

Ellen Eager Murderer wrote: »

A HR department would be hung out to dry if they gave away any sensitive information. They could also refuse to disclose any info if they wished, it would be will within in their rights to not discuss an employee.

Not saying they would or wouldnt but would you expect a bank you were borrowing from to ignore it if it happened. I would expect them to ask for revised written conformation of employment status.

f3232

rgmmg wrote: »

You may be made redundant but may not (hopefully the latter ).

I have no direct knowledge tbh but if you're made redundant it would be a material change in circumstances and I guess you would have to disclose that to the lender.

You would have to do nothing if you did not want to.

f3232

JimsAlterEgo wrote: »

Not saying they would or wouldnt but would you expect a bank you were borrowing from to ignore it if it happened. I would expect them to ask for revised written conformation of employment status.

Which you would get from HR if you were still employed.

Woodville56

f3232 wrote: »

You would have to do nothing if you did not want to.

In my view that would be a quite irresponsible approach to take ie. knowingly drawing down the mortgage when the terms and conditions under which the mortgage was approved ( based on certified factual financial/ income & employment status) had adversely changed.
Hopefully the OP isn't facing redundancy and irrespective of whether one salary could support the repayments, in the event of the redundancy happening before sign off on the contract, I would be advising the lender of the changed financial position and hoping to renegotiate terms for the mortgage.

f3232

Woodville56 wrote: »

In my view that would be a quite irresponsible approach to take ie. knowingly drawing down the mortgage when the terms and conditions under which the mortgage was approved ( based on certified factual financial/ income & employment status) had adversely changed.

In your view that all fine. However the OP believes she can afford the mortgage on one salary, the morality of what she is doing is completely up to her as I see it.

I would be advising the lender of the changed financial position and hoping to renegotiate terms for the mortgage.

And you know full well the OP would not have a hope in hell of renegotiating terms if advising the lender of these potential changes.

Beaner1

f3232 wrote: »

In your view that all fine. However the OP believes she can afford the mortgage on one salary, the morality of what she is doing is completely up to her as I see it.



And you know full well the OP would not have a hope in hell of renegotiating terms if advising the lender of these potential changes.

She wouldn't have a hope in hell because her risk profile has completely changed. Her saying she can afford the payments is irrelevant. Go to the bank and see if they agree.

ABajaninCork

Beaner1 wrote: »

She wouldn't have a hope in hell because her risk profile has completely changed. Her saying she can afford the payments is irrelevant. Go to the bank and see if they agree.

You're right. The risk profile will change IF the OP has been made redundant. We don't know that. She hasn't been back to clarify, so I'd assume all is well.

f3232

Beaner1 wrote: »

She wouldn't have a hope in hell because her risk profile has completely changed. Her saying she can afford the payments is irrelevant. Go to the bank and see if they agree.

Ultimately its up to her to make that assessment on her risk, she claims her husband wages is enough to afford the mortgage- any other speculation by other posters looks like is moralizing speculation.

Woodville56

f3232 wrote: »

Ultimately its up to her to make that assessment on her risk, she claims her husband wages is enough to afford the mortgage- any other speculation by other posters looks like is moralizing speculation.

If you feel that cautioning against knowingly entering a mortgage agreement where the terms and conditions (on which the mortgage approval is granted ) have adversely changed is " moralising" , that's your view, a view I wouldn't agree with. Genuinely hope it works out for the OP, no malice intended !

runawaybishop

f3232 wrote: »

Ultimately its up to her to make that assessment on her risk, she claims her husband wages is enough to afford the mortgage- any other speculation by other posters looks like is moralizing speculation.

If it was ultimately up to her then why would she need to get approval at all for a mortgage, she'd just tell the bank she should get one :rolleyes: