House Purchase Mortgage Conundrum

WWSTD?

Not come on STW and ask but make a decision between myself & family given you & your family will be in a far better position to assess your finances, future employment potential & risk level than us. Its not a question Id want out there even if you are incognito. Good luck as that is truly crappy timing

Honestly, this sounds like a terrible idea that I wouldn’t consider in a million years.

Good luck as that is truly crappy timing

Spectacularly, after a truly crappy 8 months of all sorts of house buying BS, just as we thought our lock was turning.

Mortgage companies manage risk. You as an individual can manage risk.

Do you currently own a house?
If not then do as you suggest. The only thing worse than losing your job when owning a kouse is trying to rent a house with no job!

I seem to recall having to sign a statement saying I wasn’t aware of any significant change to my income or employment status before my mortgage was finally signed off.

The mortgage company will never know.

You could lose you job the day you moved in. I lost my job 2 weeks after I moved last year. Got a new jobs a few weeks later. No drama.

Full steam ahead!!

I'm with Flaperon...sounds like a monumentally stupid thing to do...I'd be reading every word of any documents I'd signed or am asked to sign

(Freely admit I am pretty risk averse when it comes to stuff like this)

Ps losing your job after you move in is very different

Dooo it, dooo it, dooo it, dooo it......

I would imagine not disclosing it if the mortgage isn’t already signed off and approved would be fraudulent, since at some point you’ll be signing an agreement that was given based on information that is now incorrect, and choosing not to tell them.
I’m no expert though…

If you say nothing and continue that will be fraudulent misrepresentation; in layman's terms, mortgage fraud.
You mayget away with it; suggest you do some serious research into the implications.
Same as everyone else who's posted, I don't have a dog in this fight but I'm definitely with Flaperon and Twodogs - continuing and saying nowt is monumentally stupid.

As above, i believe this is defined as mortgage fraud, as you haven't signed for it, and at the time you will, you will not be signing against factual data in your application.

It's a crap show, but between now and the offer, you have a chance to find that new job to make an amendment that wouldn't affect the offer, prior to then signing for the mortgage funds.

Realistically though, it looks like a new application is needed, either via the guarantor route or whatever means you have available, the current application for me is dead in the water if you were to sign for it and something went wrong, i know they don't really investigate this stuff in much depth if you're paying on time, but it's that guilty conscience feeling i'd be getting.

I'd weigh it up if I was confident do 6a 12mth jobless stint I'd do it. That's 11month more than most people

I’m way out of touch being 12 years since last bought, but I do recall then mortgage company contacting employer for verification of employment.

That still a thing? or overtaken by online quick credit checks?

argee, agree the chance of being the 1 in 250 who get rumbled is...1 in 250.
alter_ego, if you're that one unlucky individual I would suggest you'll be stuffed for much longer than might be anticipated.
If you're using a broker I would suggest disclosing to them and discussing options around parental guarantors.
It's a shit situation, that's for sure, but before doing anything which could make it much worse think very clearly about options and possible consequences.

I do recall then mortgage company contacting employer for verification of employment.

That still a thing?

Yes, that is still a thing.

Lenders also use a fraud database (cifas) to flag fraudulent applications. Having a flag put on there isn’t going to help with future mortgage applications. Some employers check cifas too…

I’d weigh it up if I was confident do 6a 12mth jobless stint I’d do it. That’s 11month more than most people

It’s not the jobless stint I’d be worried about it’s the 6-12 months inside for fraud! Mortgage companies like to make examples of people to deter others.

Are you actually being made redundant or just at risk of redundancy? Since usually the former follows a period of consultation I’m wondering how far back in the application process the “lie” goes. I’m also wondering if your employer lied to them during their checks since usually the form the send finishes with something like “are you aware of any reason why Mr X’s employment may come to an end in the next 12 months” or similar. If I was only at risk of redundancy and the process would not complete before the house move then I would be slightly less concerned about fraud (although you may still be making some statement about not aware of any forthcoming material change in circumstances).

Thank you all, I don't know what we will do and I still hope there is hope to salvage it without any risk but let's see.

Not come on STW and ask but make a decision between myself & family given you & your family will be in a far better position to assess your finances, future employment potential & risk level than us.

Ultimately yes this is how it will be decided, but there's a lot of knowledge here and I was sure that some of that would be as useful, if not more, than what id find by googling.

If you get caught, have you considered the implications of future borrowing… Can’t imagine mortgage lenders wanting to touch you in the future.

I’m way out of touch being 12 years since last bought, but I do recall then mortgage company contacting employer for verification of employment.

It is a thing, but i believe he's stated he's through the application and awaiting offer, so i'm guessing he was employed at the time of the verification, now when it moves to actually signing for the mortgage i'm not sure they do any further checks, you just sign the Terms and Conditions stating the information provided is accurate and so on, i believe the T&Cs will have the disclaimers in there about notifying the lender for any changes.

Best thing as already mentioned would be to get advice from a broker, who could advise you in advance of yore then taking the next step.

Anyway, currently awaiting mortgage offer and I’ve been made redundant!

If your job has been eliminated then that seems like a significant change that I expect a lender would be interested in.

Having said that, I can’t recall if we told our lenders about the elimination of my job back in 2017. Probably not that material as the mortgage was covered by my SO.

Since there’s a buoyant job market out there and double-digit interest rates don't seem imminent maybe your lenders will just say ‘whatever’?

Very pesky situation. And while it’s no comfort now, you’ll get through somehow whatever.

I work in financial services and used to specialise in financial crime and anti money laundering.

What you're describing is likely to be 'fraud by failing to disclose information', which is a criminal offense under the Fraud Act 2006.

If you have a decision in principle you will certainly be asked to confirm whether your personal circumstances have changed, and depending on the lender, they may carry out verification checks.

If you fail to disclose your change in employment, and the lender finds out, then the lender will likely decline the application, and also register the fraud with CIFAS, and other fraud prevention agencies. They register a 'Category 4 CIFAS loading' which will ruin you ability to obtain any credit in the future, not just mortgages.

It's unlikely the police will give a shit about this kind of fraud, but that's just because they're swamped, and there's too much fraud for them to investigate everything.

A CIFAS loadings can impact things like rental applications and job applications of the company screens for this kind of thing.

Your choice at the end of the day.

Speak to the broker if you are using one already, or if you are going direct, find a broker and explain your circumstances. I'd be very surprised if there wasn't a mortgage product that couldn't be found in your circumstances, especially if your parents are willing to act as guarantor.

I wouldn't just plough on with the existing application though.

I think you need to speak to people.

Your financial status could be wrecked for years, it just isn't worth it.

There will be other houses. Try again when you have a new job secured.

Love this thread.

Some good insight into the implications of not disclosing by @dropelinked.

If you fail to disclose your change in employment, and the lender finds out, then the lender will likely decline the application, and also register the fraud with CIFAS, and other fraud prevention agencies. They register a ‘Category 4 CIFAS loading’ which will ruin you ability to obtain any credit in the future, not just mortgages.

@droplinked has stated it a lot better than me, the main worry is the bit he's stated above, i completely forgot about this bit, which is pretty much the worst, as it'll have lifelong implications, or until it's lifted.

wait for the mortgage offer to come through, then read the T&C's attached to it - or if you can get the T&C's in advance, read them now.

I'd expect the T&C's will contain something about you having to declare true info etc etc, but its those T&C's that you are bound by, so read them and then decide what you will do based on them , dont go on hearsay etc etc, go on facts, read the T&C's and go from there.

I'm reasonably risk averse, so I would be seriously re-considering my plans to take on extra debt and risk at a time when I may be in a situation where I would be either making fraudulent statements to an organisation who can and may very well take action if they find out, or put myself and family in a situation where we may struggle financially.

First things first. get a job, then get the mortgage sorted out, yes you'll loose this house, but life's like that occasionally. Make your peace with it and move on.

It is a thing, but i believe he’s stated he’s through the application and awaiting offer, so i’m guessing he was employed at the time of the verification, now when it moves to actually signing for the mortgage i’m not sure they do any further checks, you just sign the Terms and Conditions stating the information provided is accurate and so on, i believe the T&Cs will have the disclaimers in there about notifying the lender for any changes.

Indeed, the application was fine and above board, it is the notification of any changes piece.

Just no. If you get caught out you'll be stuffed in the long term. Not worth the risk

Since there’s a buoyant job market out there and double-digit interest rates don’t seem imminent maybe your lenders will just say ‘whatever’?

Possible (ignoring the sarcasm). And interestingly I was applying for new jobs anyway at the beginning of the process and alerted them to this in case a new job meant they were less likely to lend. The response was once the offer was made it didn't really matter and I probably didn't need to alert them to a new job, as long as the information the application was made on was accurate. Obviously having no job is entirely different but perhaps suggests their bigger concern is accuracy of initial application than changes after the fact. Or maybe I'm just desperately fishing for hope!!!

Obviously having no job is entirely different but perhaps suggests their bigger concern is accuracy of initial application than changes after the fact. Or maybe I’m just desperately fishing for hope!!!

This is why you need to read the T&C's of the offer. When you applied for the mortgage you answered their questions truthfully and accurately, ie at the time of application all was in order otherwise they wouldnt have agreed to lend the money . Now circumstances have changed, which is just normal life really, as time goes on circumstances do change, yours just changed at an awkward/potentially sensitive point in the house buying process, you need to know whether the lender cares about this at THIS stage in the process, read the T&C's - if there is nothing in there about having to declare a material change in circumstances since application etc then I think you're in the clear.

This is a business transaction - treat it like one , you've assessed your appetite for risk and have decided you're quite comfortable to carry on (I'd do the same in your situation) , now you need to know whether the lender needs to know this info, just read the T&C's to find out.

Nothing to offer to this other that to say how sorry I am this is happen to you. House moves are a stress nightmare, its really not fair that you are having to deal with this as well.

Just read the small print very very carefully.

Nothing to offer to this other that to say how sorry I am this is happen to you. House moves are a stress nightmare, its really not fair that you are having to deal with this as well.

Thank you, between the problems that have already occurred with this house move, and a redundancy, it has been a truly shite year, off the back of a pretty shite 3 years beforehand and we really thought our luck was turning when this house came up.

I'm not going to be much help to the OP here beyond agreeing it's a bummer of a position to be in. Years ago, I might be been tempted to wing it. With family and tech being a bit better these days, I'm not so sure.

But a question for a few of the financial types on here, if this is the offence of fraud by false representation, then one of the requirements is that there must be an intent to make a gain for oneself, a loss for another, or expose another to a risk of loss.

Question is, because this is a secured loan, if the worst came to the worst, surely the lender can recover its outlay entirely by repossession and sale of the property?

And I guess the follow up question would be how on earth would intent be established?

I can see how a lender would easily apply a fraud marker, because it is a misrepresentation, but just interested in why anyone would think there's a criminal act going on.

or expose another to a risk of loss

Probably depends what the loan to value is and which way the housing market is heading - negative equity anyone?

The slow pace of everybody involved in buying and selling houses (my current experience) means you can probably use delaying tactics until you get a new job offer without anybody in your chain pulling out.

But a question for a few of the financial types on here, if this is the offence of fraud by false representation, then one of the requirements is that there must be an intent to make a gain for oneself, a loss for another, or expose another to a risk of loss.

Question is, because this is a secured loan, if the worst came to the worst, surely the lender can recover its outlay entirely by repossession and sale of the property?

Can it? I suspect that many repossessions still end up with a net loss to the lender. Legal fees for the repossession, lower resale values of repossessed houses, legal fees of the sale, internal admin costs etc. Thats before you consider any risk of general house prices falling between purchase and recovery of the funds. Its an interesting legal point though.

<block>And I guess the follow up question would be how on earth would intent be established?

Does the intent require simply to the deception with the consequence irrelevant so long as it did in fact cause a loss or expose to risk of loss OR does the intent need to be to cause a loss or risk to loss? If the mens rea really requires the beneficiary to intend loss it would seem that you have a strong defence for many a fraud case where the accused niavely believes it will all come good in the end and intends no harm to the victim. I don't think that's the reality although I would (sadly!) be genuinely interested in case law arguing the point.

Probably depends what the loan to value is and which way the housing market is heading – negative equity anyone?

65% LTV in an area that tends to weather any downturn well. If it ends up in negative equity I'd expect the entire country will be in a catastrophic meltdown that makes current issues seem insignificant.

@Rich_s It's ultimately up to a court to determine whether a criminal offence has been committed or not - innocent until proven guilty and that. The likelihood of the police investigating and taking a case of this scenario to court are pretty low - as mentioned before, they don't give a shit about this kind of thing. The mortgage fraud they do investigate is usually of the organised kind.

However, if charges were brought, then the 'intent' in this scenario could easily be demonstrated by the fact that by failing to disclose information the OP will:

(1) gain something (a big ass loan for a house), and;
(2) will expose another (the mortgage lender) to a risk of loss (not being able to pay them back)

The definition of the offence "Fraud by failing to disclose information" under the Fraud Act 2006 covers either of these 'tests'.

The 'secured loan' argument would not stand up at all. That's like saying stealing something that is insured isn't a crime.

+1 for delay and get another job or jobs pronto. Family member who could employ you very temporarily on the same money whilst you find something permanent?

Apologies if I've missed it, but the obvious question is: what is the price and LTV of this new house compared to your current one?

Having rented recently in the UK market, whilst vacillating about whether to drop a huge amount on a new house whilst our employments were a bit shakey, I would say to just go ahead and buy the damn thing.

(Assuming, as you say that you'll find a new job easy and it isn't an insane amount more cash.)

Reading original post. If you haven’t received your mortgage offer you must be near the start of house buying process and best action would be to abandon. Offer times are running slow in the industry at moment and you need a valid offer to even exchange on a sale. Offer and ESIS documents will specify all terms of the mortgage and conditions and somewhere in here will be clauses on notification of material changes in circumstances. Loan affordability will be checked on loan to income ratio and stressed based PRA rules Probably doesn’t help but I would not recommend going ahead regardless

Apologies if I’ve missed it, but the obvious question is: what is the price and LTV of this new house compared to your current one?

Don't really want to discuss figures but price is high, approx +40% above the property we are selling. LTV is 65%.

Reading original post. If you haven’t received your mortgage offer you must be near the start of house buying process and best action would be to abandon

Quite far advanced. We had an offer earlier in the year for a property that fell through. We have since found another one on which the previous sale had fallen through so got a good deal for moving quickly, so it's all happening fast and should be a relatively straightforward shift of the previous offer to the new property. We should have that within a week or so

I don't think waiting for a new job will help,don't they want six months/probation period/whatever to elapse before they accept you are permanently employed?
.
You say you can manage 12-18 months on savings.
If you chucked this at the house instead and, say, got the LTV down from 65% to 50%, would your partner be able to take on the mortgage on their own?
Then you'll just have to get a new job probto so that you can buy food and things

I don’t think waiting for a new job will help,don’t they want six months/probation period/whatever to elapse before they accept you are permanently employed?

Nope, already covered that off as I'd been applying for a job when we first applied and wanted to be sure that wouldn't scupper it if it happened before mortgage completed. They were happy with offer letter.
Have previously had mortgage accepted on an offer letter with another lender too.

I may have missed this, but when do you get made redundant OP? These things in my experience are usually drawn out and take ages, with some employees then being extended to stay on longer.

Possible reprieve that my employer may want to extend my employment to finish some stuff off past entry date. Though reading the offer I'm not clear if the reference to "change in circumstances" would cover an upcoming changes in circumstances or whether the circumstances literally have to change before the loan is issued (I think the latter).

You're still being made redundant, only the end date has changed of the termination.

Therefore your circumstances have still changed - your still not going to have a (the) job soon, and you know it.

If theyd said ''Alter_Ego, weve recinded your redundancy notice' - then youd be fine... but they havent have they?

You’re going to go ahead with the mortgage anyway so I don’t know why you asked!

Perhaps you expected everyone to say crack-on.

I'm with muffin on this and..am out.

Yep me too

You’re going to go ahead with the mortgage anyway so I don’t know why you asked!

Perhaps you expected everyone to say crack-on.

Actually no and no. The points made have been genuinely useful so thanks and apologies if it came across that way at any point.

Perhaps nobody cares but thought I'd drop in to thank everyone again for the food for thought, it definitely helped and pointed out some things I had not considered (for and against). Had a very honest conversation with the mortgage co. today and we are working through what might be possible to salvage something, so let's see. At least it is not completely dead in the water.