Mortgage before taking a permanent role

[Trinks]

Hello guys,

Sorry to answer only now, thought that my account was not validated and message not posted.

Thank you for your comments and advices.

As I have said previously, my current company will quit UK end of June, so I have to consider to find another opportunity.
It seems, that it become harder to find another contract and may be easier to find a permanent role.

I am starting interview process to train myself and have an idea of the current market for IT developers and I have 1 month notice.
On the other hand, I am prospecting the market on my area, and I am interested by house £600-700k display price.
I have about 10% deposit.
I know if I become permanent, or contract with a lower rate, I should consider if I could afford the mortgage anymore, it is my own responsability, I am aware about it.
I would borrow for myself, and my partner that doesn't work for the moment could be able to find a job and help if necessary.

If I can have a mortgage completed before I change my job (accept any offer), could it be OK?
Or have I to tell that my end client will leave UK, so my contract would probably ends and then, all this process falls through?

If I am processing after changing my job, I may not be able to buy any propecting propeties before many years (if the market haven't rise on the same time).

Thanks a lot

[Snooky]

I know if I become permanent, or contract with a lower rate, I should consider if I could afford the mortgage anymore, it is my own responsability, I am aware about it.
I would borrow for myself, and my partner that doesn't work for the moment could be able to find a job and help if necessary.

If I can have a mortgage completed before I change my job (accept any offer), could it be OK?
Or have I to tell that my end client will leave UK, so my contract would probably ends and then, all this process falls through?

If I am processing after changing my job, I may not be able to buy any propecting propeties before many years (if the market haven't rise on the same time).

Your last sentence says it all really. You effectively admit that when your current position ends, you may not meet affordability checks for the type of property you want to buy.

Lenders by law have to be extremely thorough in checking that a borrower can afford the mortgage, in addition to which no lender wants to have to evict a borrower when they can't pay, it's bad for PR, takes a very long time, and they're very unlikely to get all of their original loan back, let alone the unpaid interest.

As a borrower, by law you also have to play your part by disclosing anything which might affect your ability to afford the mortgage. You already know your current UK contracting position is due to end. You don't have another job offer so you have no idea what income you'll be earning after that point (could be £90k, could be £0), nor whether your partner can get a job and what they would earn if they can.

If you were a lender and had all that information from a borrower, would you lend them money long term based on their current earning level without any other collateral? Of course not. You don't need a mortgage adviser to tell you that.

You need to disclose all pertinent information. If that means you can't get a mortgage for the type of property you want in the area you're looking at, then you need to adjust your expectations - smaller property or different area.

[Trinks]

Your last sentence says it all really. You effectively admit that when your current position ends, you may not meet affordability checks for the type of property you want to buy.

Lenders by law have to be extremely thorough in checking that a borrower can afford the mortgage, in addition to which no lender wants to have to evict a borrower when they can't pay, it's bad for PR, takes a very long time, and they're very unlikely to get all of their original loan back, let alone the unpaid interest.

As a borrower, by law you also have to play your part by disclosing anything which might affect your ability to afford the mortgage. You already know your current UK contracting position is due to end. You don't have another job offer so you have no idea what income you'll be earning after that point (could be £90k, could be £0), nor whether your partner can get a job and what they would earn if they can.

If you were a lender and had all that information from a borrower, would you lend them money long term based on their current earning level without any other collateral? Of course not. You don't need a mortgage adviser to tell you that.

You need to disclose all pertinent information. If that means you can't get a mortgage for the type of property you want in the area you're looking at, then you need to adjust your expectations - smaller property or different area.

Indeed, you are absolutely right, may be reckless without having a better eyesight of my future.
The reason would be to wait even if it could take year before to be able to be able to save enough to counterbalance an potential reduced mortgage affordability.

Thanks

[Wobblyheed]

Hello guys,

Sorry to answer only now, thought that my account was not validated and message not posted.

Thank you for your comments and advices.

As I have said previously, my current company will quit UK end of June, so I have to consider to find another opportunity.
It seems, that it become harder to find another contract and may be easier to find a permanent role.

I am starting interview process to train myself and have an idea of the current market for IT developers and I have 1 month notice.
On the other hand, I am prospecting the market on my area, and I am interested by house £600-700k display price.
I have about 10% deposit.
I know if I become permanent, or contract with a lower rate, I should consider if I could afford the mortgage anymore, it is my own responsability, I am aware about it.
I would borrow for myself, and my partner that doesn't work for the moment could be able to find a job and help if necessary.

If I can have a mortgage completed before I change my job (accept any offer), could it be OK?
Or have I to tell that my end client will leave UK, so my contract would probably ends and then, all this process falls through?

If I am processing after changing my job, I may not be able to buy any propecting propeties before many years (if the market haven't rise on the same time).

Thanks a lot

If you're working up north you could buy Doncaster for that...

[sal]

Indeed, you are absolutely right, may be reckless without having a better eyesight of my future.
The reason would be to wait even if it could take year before to be able to be able to save enough to counterbalance an potential reduced mortgage affordability.

Thanks

Or you can buy a cheaper property that you would be able to afford on a perm salary...

Even if you go for a mortgage fraud and get the higher mortgage now, will you be able to afford £3k+ payments on the current SVR with £90k-100k salary? That's more than half of your income.

What happens in the likely scenario that there is a dip in the property prices in the next couple of years and you end up in negative equity?

[BlasterBates]

What is the usual punishment for this? (assuming you never miss a mortgage payment)

Mortgage applications are routinely checked for fraud, if they spot a falsified document your application will be turned down and it will be handed over to the crown prosecution service. It depends on how successful you can hide it. It might also become a problem when you default as your case will probably be re-checked.

[SimonMac]

I'm pretty sure that one question on the mortgage form will be along the lines of:

"Do you expect a change in circumstances in the next 12 months"

Pretty sure you're going to have to lie on that one which means your are ****ed from the start.

[SimonMac]

What is the usual punishment for this? (assuming you never miss a mortgage payment)

18 months in prison

Tommy Robinson, former EDL leader, jailed for fraud - BBC News

[Lance]

my god.

Just read this thread for the first time. It's like the credit crunch never happened.

£700k house. 10% deposit is a £630k mortgage.
At 2% (not sure just 10% depoist will get that good a rate mind) that's £2670 per month. Over 25 years.
Just bump the rate up to 5%, it's now £3682 per month. I can live off that money. Not sure I'd want to tied to a mortgage like that for 25 years though.

Drop it to 10 years, at 5% and the monthly is £6682

Or 25 years at 7.5% (reflects the long term average better I think). £4655 a month.

That is eye-watering. I cannot see that I'd ever want to borrow more than £250k, and for no more than 10 years, and I'm of a similar income bracket to the OP (and have around £300k in equity).

To the OP..... Buy what you can afford long term. Save. And move later when you have the assets to do it with less risk.

[GhostofTarbera]

my god.

Just read this thread for the first time. It's like the credit crunch never happened.

£700k house. 10% deposit is a £630k mortgage.
At 2% (not sure just 10% depoist will get that good a rate mind) that's £2670 per month. Over 25 years.
Just bump the rate up to 5%, it's now £3682 per month. I can live off that money. Not sure I'd want to tied to a mortgage like that for 25 years though.

Drop it to 10 years, at 5% and the monthly is £6682

Or 25 years at 7.5% (reflects the long term average better I think). £4655 a month.

That is eye-watering. I cannot see that I'd ever want to borrow more than £250k, and for no more than 10 years, and I'm of a similar income bracket to the OP (and have around £300k in equity).

To the OP..... Buy what you can afford long term. Save. And move later when you have the assets to do it with less risk.

£700K is a one bed flat where I live

£250K gets you a 30% house share


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