Mortgage application & Redundancy

I'm in the process of selling my home and looking for a bigger one. I have mortgage in place already and just waiting to sell my own place before buying another. In the meantime, I have been made redundant. Will not happen for another 2 months and am not worried financially as in my line of work there are plenty of jobs. So my dilemma is this: I have not sold or bought yet and am afriad that if I do go sale agreed in the next few weeks I may not be in my current job when I draw down the mortgage. Will this affect them lending the money? I am not sure whether to take my house off the market and wait until I am in my new job 6 months or just continue as planned?

loodles said:

I may not be in my current job when I draw down the mortgage. Will this affect them lending the money?

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I would expect so since lenders normally require you to report any changes in circumstances to them between approval in principal and drawdown and usually require you to be in a permanent position beyond any probationary period.

Technically I should still be in my job when i draw down but if there are any delays it could run over. I know my employer would be decent about giving me letter to say my leave date is later etc. Should I just fess up to my broker and see what he says or play it by ear? I'm so confused as to what to do!?

I am afraid I have some bad news for you.

I was recently at a party and was chatting with a couple there who both work for different major financial institutions. I have just signed contracts and asked, if there were anything that could go wrong now that I have the official letter of offer from the bank. The woman who works at the bank said that the only time she ever stopped a transaction and didn't issue the cheque after issuing the official letter of offer is when she heard that the company the individual was working was relocating. She said it was hard, but she had no choice as the person potentially didn't have the security to pay the mortgage. From what she said, she didn't know that the individual was definitely going to lose her job - just that it was in jeopardy and they still refused to proceed with cheque issue.

I know this is anectdotal at best but is something that does happen.

Best to speak to your bank and clarify your position. It might be an idea to quit or leave your job now and find another position before proceeding further with any conveyancing. You certainly don't want to be jobless and worried about paying a large mortgage.

loodles,

you have nothing to worry about apart form the fact that will you be able to sell your own place.. i'm presuming its a provisio on completing on the new place anyway...

i was in the exact same position a couple of years back and my advice is to proceed as per normal... the bank do not need to know if you are being made redundant...you have been approved and waiting to draw down..

best of luck,

Can you not secure a new job now rather than wait for the redundancy period to be up?

You have an obligation to inform the lender of any change in circumstances. When they find out it will most probably affect your application - waiting until six months probation is up is pretty much a standard requirement. However depending on whether or not you are a professional and expected future employment and salary they may look more favourably on you.

Whether you inform them and potentially suffer any consequences is with you.