Applying for a Mortgage when my employer is considering a restructuring plan??! Help.

Nat29

Hi There, Sorry if I have not posted this in the correct thread.

My bank has 'provisional' approved me for a mortgage. I have been working in my job just over 5 years.

7 months ago my employer announced a restructuring plan or a possible sale of the company. As of yet we have not been given any further details or information as to what is happening with the company.

My payroll department have completed the employer section of my mortgage application form and they did say I am a permanent employee. My worry is, that the bank will do a check on my employer and they will see that the company is under a restructuring plan or even a possible sale of the company.... If this is the case will my application be rejected even tho my employer said my position is permanent??? :mad::mad::mad:

eagle_i

Nat29, the bank do not ask such questions as how your employer is running the business you are only the employee and have no control in that event. They can only process your application based upon the information requested. If you employer is saying you are permanent, for all intents and purposes you ARE permanent at the time of the application. If this situation changes following drawdown of the mortgage there is nothing the bank or you can do at that stage!

If you feel your job is on the line and you do not want to be burdened with a mortgage, well then that is a different situation. Once you meet all the criteria of the mortgage terms at the point of application the bank will approve you. If the banks were operating in this manner then nobody will get approval, except those in the civil service, even that is not a sure thing anymore!

Nat29

eagle_i wrote: »

Nat29, the bank do not ask such questions as how your employer is running the business you are only the employee and have no control in that event. They can only process your application based upon the information requested. If you employer is saying you are permanent, for all intents and purposes you ARE permanent at the time of the application. If this situation changes following drawdown of the mortgage there is nothing the bank or you can do at that stage!

If you feel your job is on the line and you do not want to be burdened with a mortgage, well then that is a different situation. Once you meet all the criteria of the mortgage terms at the point of application the bank will approve you. If the banks were operating in this manner then nobody will get approval, except those in the civil service, even that is not a sure thing anymore!

Hi. Ok, Great... thanks for that.. hopefully there wont be any issues so!

highgiant1985

Nat29 wrote: »

Hi. Ok, Great... thanks for that.. hopefully there wont be any issues so!

is there any chance this restructuring of the company could lead to any job loses? i.e. you being made redundant? I'd just be very slow in the current climate to take out a mortgage if that was a possibility in the near future.

Best of luck with things though.

chris85

if there is any uncertainty about your job in your view i would not go ahead with the mortgage application. If you do get laid of what do you do then?

gogo

Nat29 wrote: »

Hi There, Sorry if I have not posted this in the correct thread.

My bank has 'provisional' approved me for a mortgage. I have been working in my job just over 5 years.

7 months ago my employer announced a restructuring plan or a possible sale of the company. As of yet we have not been given any further details or information as to what is happening with the company.

My payroll department have completed the employer section of my mortgage application form and they did say I am a permanent employee. My worry is, that the bank will do a check on my employer and they will see that the company is under a restructuring plan or even a possible sale of the company.... If this is the case will my application be rejected even tho my employer said my position is permanent??? :mad::mad::mad:

You are under obligation to inform the lender of any change of circumstances, from recieving your offer letter to the date of drawdown. Not to do so would be considered fraudulent and misleading your lender. Read the terms and conditions with the offer letter.
Also the bank could ring your employer at any time before draw down to verify your position, its does happen regulary.
Any other suggestion is fraud (looks at you eagle_i) and against the charter of this forum too. The op is fully aware that he is permanent, but he is also aware that there is a restructing/resale plan in the pipeline.

Listen op, just contact your bank, if your in professional employment and will probably get a new job if the worst happens, they still might go ahead, or they might amend the mortgage to meet your new circumstances. Its not worth going down the other route, the bank will have agreed the mortgage on your present circumstances, they will have completed stress tests on those circunstances, you are completely changing the playing field, and its unacceptable to do so.

eagle_i

gogo wrote: »

You are under obligation to inform the lender of any change of circumstances, from recieving your offer letter to the date of drawdown. Not to do so would be considered fraudulent and misleading your lender. Read the terms and conditions with the offer letter.
Also the bank could ring your employer at any time before draw down to verify your position, its does happen regulary.
Any other suggestion is fraud (looks at you eagle_i) and against the charter of this forum too. The op is fully aware that he is permanent, but he is also aware that there is a restructing/resale plan in the pipeline.

Listen op, just contact your bank, if your in professional employment and will probably get a new job if the worst happens, they still might go ahead, or they might amend the mortgage to meet your new circumstances. Its not worth going down the other route, the bank will have agreed the mortgage on your present circumstances, they will have completed stress tests on those circunstances, you are completely changing the playing field, and its unacceptable to do so.

Gogo, answer the OP’s question, not the question you think is asked!
As you will see if you correctly READ my post I stated, ‘If the situation changes FOLLOWING DRAWDOWN of the mortgage there is nothing you or the bank can do at that stage!’
Show me where in that statement or anywhere else in my post do I suggest the individual should perpetrate a fraudulent act?
I would appreciate it if you would retract your totally unfounded insinuation that I was suggesting the OP should fraudulently mislead their lender and that I am in breach of the forum rules and charter. If this is the situation, I’d expect the moderators to have done their job and delete/edit the offending post. Perhaps the moderators can clarify that my post does not breach the forum rules/charter?
Sorry OP, if this is distracting from your original query.

gogo

relax there eagle i, I did answer the posters question, He wants to know if the fact that he and his company ommited to tell the bank that the company may be restructured or sold, will it affect his 'provisionally' approved mortgage application. Basically will the bank find out.


The poster is still at the application stage of his mortgage, you are telling him for all intents and purposes that he is a permanent employee for that application. Which he is, your right, but he's now enterning into an aggreement under false pretenses, which is fraudlent. your also saying that the bank only go on requested info, more often than not, they will ring employers etc to verify information provided, basically they do ask how the employer is running his business, especially now in this climate. By telling the op that that is application is fine because he's permanent at the time, "information requested" (meaning dont say anything about the restructure -reading between the lines) is wrong & fraudlent, basically your saying let them worry about it if it happens. Sure you answered the question, badly and its not as simple as your answer, if you dont know what your talking about, dont reply.

Also saying that there is nothing they can do after drawdown is crazy, his mortgage protection would more than likely be declared invalid (if he did lose his job) if it arises that there was suggestion of re-structure/resale in the pipeline during application and he was aware of it and failed to mention it.

eagle_i

A couple things here Gogo, I have yet to come across a mortgage application/lender which asks, ‘Is your employer proposing a company restructuring and/or sale process?’ Maybe you can enlighten me with your superior knowledge, obviously with over 20 years working in the financial services industry, it is the one thing that has escaped me?

The OP stated the employer is proposing a restructuring of the company with a view to possibly selling. From my understanding of his post it was left that way – he was not specifically told his job is on the line. Therefore he is not making an application under false pretences, as you can only make a declaration based upon your current status, not what may or may not happen in the future. If it is a case that the OP was told at that time that he is looking at a change in employment status (eg. redundancy/shorter hours), well then of course he has a duty tell the facts – all material facts must be disclosed. Likewise, the employer in completing their section of the application must disclose any material facts, to do otherwise is irresponsible of an employer. Yes, this responsibility carries through while awaiting drawdown of the mortgage, therefore any change in circumstances prior to drawdown the applicant must disclose this, it is not only part of the T&C of their letter of offer, but a wise move too – nobody wants to be burdened with mortgage repayments without an income to support the payments.

Furthermore the fact is, following drawdown of the mortgage if a person finds they are out of a job, there isn’t a whole lot the bank can do, it is up to the individual to meet the repayments thereafter. If, however, the person had intimate knowledge that they were about to lose their job when drawing down the mortgage, well then in this instance they had mislead the lender.

Finally, here is where you should practice what you preach and only comment on something you know about! A mortgage protection is a life policy, the only reason it would become invalid is if you lied about your health circumstances on your mortgage protection application form. A mortgage protection policy pays out a lump sum in the event of death (critical illness can also be part of a mortgage protection policy). It has nothing to do with your employment status, apart from a risk point of view, ie. high risk job, such as a steeple jack, deep sea diver.

Reading between the lines of your last post, you mean Mortgage Payment Protection Cover, which pays out in the event of a person being unable to work due Accident, Illness or Redundancy. It as such takes over the monthly repayments of your mortgage while you are out of work for a period up to 12 months. With this policy you are required to disclose if your company is proposing a restructuring plan and/or if there had been any recent redundancies. If it is found you had knowledge of the restructuring plan and/or redundancies at the time you were taking out the Mortgage Payment Protection Cover, then your claim will be declared invalid.

chris85

give it a break lads. OP if you feel you are in risk of losing your job then you are best to hold off until the restructuring happens just to be safe. It would be irresponsible to drawdawn a mortgage if unsure of the security of the job.

You have no obligation to tell the bank but be prudent about the security of the job.

We all must learn lessons from the recession and being responsible at borrowing is something that we never done well in this country. of course there are irresponsible lenders there as well but we all have our part to play.