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Will banks lend to someone whose company isn’t doing well?

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  • 07-12-2017 3:47pm
    #1
    TracyFlick
    Registered Users Posts: 48 ✭


    We’ve been told that our company is going to be laying off around a third of employees after Christmas. I was hoping to buy my first property in the first quarter of next year. :(

    Even if I survive the redundancies, will the banks now run a million miles from me as a mortgage candidate? If that’s the case, I may as well start to look for other jobs anyway, as if I can’t get a mortgage, I don’t want to be stuck in limbo here for nothing.

    It’s such a shame. Merry Christmas!


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    #2
    amcalester
    Closed Accounts Posts: 4,121 ✭✭✭amcalester


    How would they know?


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    #3
    Tenigate
    Closed Accounts Posts: 849 ✭✭✭Tenigate


    I remember working in Permanent TSB when they suddenly stopped giving mortgages to their own staff... within a year later redundancies were announced. Turns out they did their staff a huge favour as it saved them losing a lot of money on their properties.
    That being said, there's only so much the bank knows & only so much the bank would want to know. Apply for your approval in principle and stop worrying.


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    #4
    cruizer101
    Registered Users Posts: 3,205 ✭✭✭cruizer101


    I'm curious about this myself, do the bank look into the company you work for at all, size, profits, credit rating that kind of thing


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    #5
    conf101
    Registered Users Posts: 1,037 ✭✭✭conf101


    All the bank looked for from me was a letter stating I'm currently a full-time salaried employee at X company. I don't think they looked into anything beyond that


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    #6
    Tayschren
    Closed Accounts Posts: 186 ✭✭Tayschren


    As long as your in a permanent job and have met criteria for the loan it will not be a problem


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    #7
    californiabear
    Registered Users Posts: 56 ✭✭californiabear


    The banks won't check out whether your employer is in trouble or not. However, if you think there is a risk that you'll be made redundant in the near future, it would be prudent to reconsider such a big commitment as a mortgage right now.


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    #8
    johnnyskeleton
    Moderators, Entertainment Moderators, Politics Moderators Posts: 14,505 Mod ✭✭✭✭johnnyskeleton


    If you own and run the company, most Irish banks will treat you with absolute contempt and suspicion and the slightest suggestion of even a modest drop in profits will make them shake their head at you sadly, as though youre a puppy who did his business on the rug.

    But luckily, if youre an employee then they just want a piece of paper that says you are employed and a bank statement showing some money coming in and youre golden.

    Such is my experience of Irish banks anyway!


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    #9
    Sesame
    Registered Users Posts: 508 ✭✭✭Sesame


    Unless it's very public news about the company failing, then there's no way of them knowing.


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    #10
    Interested Observer
    Registered Users Posts: 13,106 ✭✭✭✭Interested Observer


    1) How would the bank know?

    2) If you're at risk of losing your job do you really want to be taking on a mortgage at the moment?


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    #11
    Ursus Horribilis
    Closed Accounts Posts: 6,168 ✭✭✭Ursus Horribilis


    If this is the situation your employer is in, buying a property should be the least of your worries. Quite frankly, you would be insane to go ahead and buy if there's a P45 looming. How will you be able to afford to pay the mortgage if your job goes and you don't get another one straight away? And what if you get another job and it's not in a location convenient to your home? A couple of twists of fate and your new home could easily become a millstone around your neck.


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    #12
    Unknown Soldier
    Registered Users Posts: 2,124 ✭✭✭Unknown Soldier


    They may not look at your company, but they will take into account the industry you are in, if said industry is having a serious downturn and a lot of companies are going to the wall etc. that's a nobrainer really.


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    #13
    MissShihTzu
    Registered Users Posts: 1,080 ✭✭✭MissShihTzu


    Ursus Horribilis wrote: »
    If this is the situation your employer is in, buying a property should be the least of your worries. Quite frankly, you would be insane to go ahead and buy if there's a P45 looming. How will you be able to afford to pay the mortgage if your job goes and you don't get another one straight away? And what if you get another job and it's not in a location convenient to your home? A couple of twists of fate and your new home could easily become a millstone around your neck.

    Totally agree with this. Settle your work situation first and then you can think about buying worry-free. You would be mad to apply now with your situation so unstable. Your priority should be updating your CV with a view to getting another job. NOT applying for a mortgage.


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    #14
    [Deleted User]
    Posts: 24,714 ✭ [Deleted User]


    Ursus Horribilis wrote: »
    If this is the situation your employer is in, buying a property should be the least of your worries. Quite frankly, you would be insane to go ahead and buy if there's a P45 looming. How will you be able to afford to pay the mortgage if your job goes and you don't get another one straight away? And what if you get another job and it's not in a location convenient to your home? A couple of twists of fate and your new home could easily become a millstone around your neck.

    Not much different to someone buying when only in fixed term contracts. I have only been on 6 month or one year contracts for the last few years (all with the same employer) which kept being renewed but equally there is nothing to say they will be and the bank had absolutely no problem giving me mortgage approval as a sole applicant. In fact some would say it will be easier to get the mortgage now than when starting another job somewhere else.

    Of course how confident you are of getting another job has a role to play also.


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