Mortgage Application Query - Voluntary Redundancy

Hi,

Just a quick query if husband and wife have 6 months bank statements (both in full time permanent employment) to show payroll information, one person takes voluntary redundancy can they apply for the mortgage application prior to the voluntary redundancy or how does that work? They would both have written letters from employers to say they are in full-time employment and x number of years service.

So what I am trying to ask is if somebody knows potentially about a voluntary redundancy could they apply for the mortgage before the voluntary redundancy while still in full-time employment?

Thank You

1. There will usually be a tick box on your application that asks if your circumstances will change in the near future. If you tick this your application wont be truthful.
2. Banks will often ask for fresh statements before the loan is drawn down.

They could apply, little bit risky on several points. Obviously it's information the lender should be given about the redundancy but I'm assuming you are not intending telling them.

The lender will probably want a standard income form completed by the employer, wonder how the employer would answer the question re the employment being permanent if they know also of the impending redundancy?

There is also the chance that the lender will look for up to date payslips when it comes to drawing down the mortgage.

deltrotter said:

So what I am trying to ask is if somebody knows potentially about a voluntary redundancy could they apply for the mortgage before the voluntary redundancy while still in full-time employment?

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Personally I would have no qualms about it. I would park the decision on the redundancy, not volunteer any information that might scupper my application, secure and draw down the mortgage . . and then consider the merits of redundancy.

deltrotter said:

one person takes voluntary redundancy can they apply for the mortgage application prior to the voluntary redundancy

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You are at serious risk of entering into a contract to buy a house which you may not be able to complete.

That is very dangerous. You could lose your deposit and/or be sued for completion.

If you draw down a mortgage and then avail of voluntary redundancy afterwards, that would be a different matter.

The main risk here is that you will be unable to afford your mortgage. This will blow your credit record and may put you under pressure, but you are unlikely to lose your home.

The only exception I would make is if you are highly employable, the bank's tick box rules might rule you out of a mortgage. But maybe you should then pay the lump-sum as payments in advance on your mortgage.

Brendan

Redundancy is never signed sealed and delivered until the last day you walk out the door. I know of people who've had it pulled 24 hrs before they were meant to finish, that's not uncommon especially in US firms

Secondly, with one salary, can you now afford the mortgage or are you in danger of overstretching yourself

Lastly, does a lump sum for VR mean you have to borrow less?

thedaddyman said:

Redundancy is never signed sealed and delivered until the last day you walk out the door.

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Correct but neither is your mortgage until you have drawn down the money.

Brendan Burgess said:

The main risk here is that you will be unable to afford your mortgage.

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Isn't this the most important issue?

Most people in Ireland get as high a mortgage as the bank will give them. The bank will underwrite the case based on two salaries. Will you be able to meet the repayments and have a decent lifestyle on one salary?


Steven
http://www.bluewaterfp.ie (www.bluewaterfp.ie)