Difficult situation with mortgage - advice?

[ontheroadtorecoveryyy]

Hi all, I'm hoping someone can offer some advice on how I should proceed with this situation. I've not spoken with my mortgage broker yet and I'm not really sure if I want to as I know legally they will have to change all my details on the mortgage application which could either slow down the process or put a stop to it all together.

I applied for a mortgage at the beginning of last month which was approved. Went through all the necessary checks and sent off the paperwork - payslips, bank statements etc.
At the time I was in a permanent role where I'd worked for the last 3 years. When I applied for the mortgage I thought I was going to be in the job long term but my situation has suddenly changed. My employment ends at the end of this week and I won't have a job. I will be paid at the beginning of next week and receive my final payslip shortly afterwards. Now this is the tricky bit - I won't be without money. I'm fortunate enough to have been presented with an exit/compensation package from my current employer for reasons I won't go into. It is a relatively large sum but won't be paid in one go due to tax reasons. I will be paid my full salary every month for the next 8 months, but it won't be through the books.

The monthly payments will be paid into my bank account but I won't receive a payslip as usual. I understand that even though I will have this income coming in every month, I am technically unemployed. I don't plan to be off work forever as I already have another job offer in place but it doesn't start until Mid September (even if this job doesn't work out there are plenty around in my area and field). How do I proceed with the mortgage application now? I'm very wary of coming clean with my advisor as I know it could ruin everything.

I am hoping to be in the property by the end of September but the searches are still taking place (longer here than usual due to covid). Solicitor has reassured me I'll be in by then as there is no onward chain and the property is vacant. My mortgage offer is valid for 90 days so I still have plenty of time. How likely is it that the lenders will ask for more payslips? My last one will be in August so I'm slightly worrying that they might ask for one in September and I won't be able to provide it. I know they usually only ask for payslips at the beginning of the process but after Googling it I've read that some lenders do ask for more paperwork right before completion. I've spoken with my current employer and told her they might contact her for a reference. She said she will word it in a way that works in my favour (not great I know but she's just trying to help out as she knows it's a tricky situation for me).

How do I proceed? Should I just take the risk and hope that they don't ask for any more paperwork? I reckon that I'm still at least two months away from completion so I'd be devastated to wait all that time (along with wasting everyone else's time) for it to be ruined at the very last minute if they ask for more payslips. Family have just told me to take the risk as it will all probably work out any way and they won't do anymore checks now. If I back out now and come clean I'll never know if it would have worked out or not. I've rented for the last 7 years, worked really hard to save up and finally found a property that I can afford which is in a lovely area (they don't come up very often) I'd be absolutely gutted to have to let it go after all this work.

Just to clarify - the exit package is 100% legal and binding, employment solicitors dealing with it all and both parties will need to sign so the money will be guaranteed.

Advice???

[ontheroadtorecoveryyy]

Just to confirm - I didn't plan for this to happen. As you can see the mortgage payments will not be affected. I will still be able to pay the mortgage every month as I'll be receiving money from my current employer and I will also be in a new job by then as well, earning more than what I do now!

[TheUndoingProject]

Have you spoken to your lawyer about this? I’d be very worried about inadvertently committing fraud. I doubt very much the bank would be impressed if they find out. Could you not show the binding agreement if asked?

[BaronessBomburst]

I'd go ahead.
If they ask for a payslip I'd tell them that you can't find it, you've applied to your employer for a copy, but in the meantime here's a bank statement showing your salary going in.

[NoWordForFluffy]

Some lenders will lend on the basis of a new job. Is yours one of those?

I certainly wouldn't actively lie to them about the position, as per PP's recommendation. Even lying by omission could be a grey area.

However, you do have the new job in place, so you should be OK. Do you have the job offer in writing? I think you really need to discuss with your solicitor.

[gigi556]

I would go ahead as normal. It seems unlikely that they'll ask for more paperwork and you have another job starting mid September anyway so seems like a moot point. You could ask your broker about it without saying it's happened? Ie what would happen if I happen to be made redundant? What other paperwork will the lender require? The broker wants the deal done. I don't think they'd inform the lender but I'm not 100% sure 🤷🏻‍♀️

[LemonSwan]

I think this depends on whether you picked a good broker and/or solicitor.

If you did then hopefully they will be working for you and will be on your side. Dont take that for granted though - They have to only work with you once, but work with the banks everyday IYSWIM. So to find one who really 'works for you' is not as common as you would think.

If they are not then thats a bit more tricky because you really need professional advice.

Perhaps sound them out, saying 'there is rumours of redundancies in the office'; if this were to happen and I was to take a package would the mortgage fall through?

[Sarahlou63]

Just go ahead but don't put your broker or solicitor in a difficult position by telling them. Between your exit payment and new job you'll be able to make the payments so no-one needs to be any the wiser.

[gogohm]

I'm not sure it's an issue because you have already been approved. Is the new job close to the money you earned before?

[ontheroadtorecoveryyy]

Thanks for all your messages, really appreciate it. No I've not spoken with my broker or solicitor. I don't want to put either of them in an awkward situation as a pp mentioned. The mortgage payments will not be an issue, I know I will be able to make the payments 100% as I will have income coming in. It is more the paperwork that I'm concerned about. I will receive a payslip mid August for the month of July but won't have anything for August should they ask for another payslip in September. I hope that makes sense. I'm probably just working myself up for no reason but after Googling things I found that some lenders do ask for additional paperwork at the very last minute. I suppose it's to catch people out.

I can either withdraw now or risk it and sit on eggshells for the next month or so and just hope they don't ask for any more paperwork 🤞

[ontheroadtorecoveryyy]

@gogohm I will be earning more in the new job

[pinksquash13]

I would go ahead and not say anything. No idea if that is sensible or not. One thing I will say about house moving is that isn't always straightforward and predictable. Plenty of people have to reapply for their mortgage because things/ people take time. I would stress the importance of a deadline (perhaps make up a different reason) otherwise you could be in trouble.

[ontheroadtorecoveryyy]

@BaronessBomburst that's what I thought but I imagine they would insist on a payslip?

[ontheroadtorecoveryyy]

@pinksquash13 exactly what I was thinking. I've already spoken with my solicitor and stressed that I would like to try and get this wrapped up as soon as possible. I said it was because I'm renting and need to give notice (which is also true). She did explain there is a longer wait than usual due to covid.

[VanGoghsDog]

It's mortgage fraud, which is a serious crime. You will find that any agreement you make with them says you must inform them of any material changes which this clearly is.

They might take account of the new job offer, but they might not, some won't make an offer until you're out of any probation period.

If you plan not to tell the mortgage company, then don't tell your solicitor either as they will fe compelled to tell them.

[VanGoghsDog]

I can either withdraw now or risk it and sit on eggshells for the next month or so and just hope they don't ask for any more paperwork

Or just tell them the truth and get them to deal with it?

[ontheroadtorecoveryyy]

@VanGoghsDog what can they do to help though? If I don't have a job surely they would just withdraw the mortgage offer any way?

[Soontobe60]

My DDs have both bought houses very recently. DD2s move took 12 weeks and they didnt ask for further confirmation of pay, whereas DD1s took 5 months in total for various reasons, and she had to provide new payslips before the mortgage company would release the funds. She’s actually on mat leave, and has stopped getting paid from work, but that didnt affect the offer.

[ontheroadtorecoveryyy]

Thanks @Soontobe60 , that's good to know. Did your DD1 have to reapply? Is that why she had to provide more paperwork? I'm hoping (and the solicitor is confident) that I will be in the property before my mortgage offer expires.

[TheFormidableMrsC]

Can you be absolutely sure that your current employer will honour the payments that are "not on the books". I don't know the background obviously but that struck me immediately.

[BaronessBomburst]

I used to be a mortgage underwriter and if we could see the money going into the applicant's bank account we wouldn't have wasted time insisting on a payslip. The banks want to lend money and process applications as fast as possible as that way it's more profitable.
On the other hand, I've been out of the industry for years now and it's got a lot stricter!

[FudgeSundae]

@TheFormidableMrsC

Can you be absolutely sure that your current employer will honour the payments that are "not on the books". I don't know the background obviously but that struck me immediately.

This. Why would a legal payment be not on the books? That’s likely illegal as if it’s not on the books either them or you or both will be evading tax/national insurance. That’s money laundering. You’re involved in something dodgy here.

[ontheroadtorecoveryyy]

@FudgeSundae because it is compensation. I am not being paid to work for them. As of this week I will no longer be their employee.

I can 100% assure you it is all above board. I had to take the settlement agreement to an employment solicitor to deal with who has confirmed it is all ok.

[TakeYourFinalPosition]

You may well be in before the offer expires, but mortgage companies do random employment checks before the money is drawn down... you may well not be selected and be fine, but if you are found out, it is mortgage fraud and that has pretty dire consequences.

I do feel for you. My DH was made redundant the day before exchange in 2019... We felt totally stuck. In the end, we talked to our solicitor, who said that we needed to tell the bank. The bank were lovely, and they were willing to take into account the redundancy payment that he was getting and that he'd already lined up interviews, but in the end we pulled out. I think we'd have been fine to go ahead.

It's a big risk to go ahead. If you decide to do it - some people do - make sure you fully understand it. You have agreed as part of applying for the mortgage that you'll keep the bank up to date on any changes, and you'll be knowingly committing fraud as soon as you continue with the application and don't let them know.

Any chance you could start the new job sooner? If you could get that shored up - at least to be legally employed by them, even if you're not actually working yet - this week, you might be able to argue it's a very loose, very grey area. But really, if the bank finds out, your offer is gone and to comply with regulations, they should report it as mortgage fraud, and realistically that could stop you from being able to get any finance products, from bank accounts and overdrafts to insurance, at normal rates.

It's massively risky, and it was the anxiety of whether they'd find out which got to me and made us decide to walk away. Make sure you know what you're doing, if you go ahead. This isn't a grey area - now that you know your employment ends this week, and that has been officially documented, it is now fraud.

[ontheroadtorecoveryyy]

@TheFormidableMrsC yes absolutely. The company have provided a settlement agreement detailing everything (total sum, payments each month, dates etc) which both parties have to sign.

[BootsScootsAndToots]

One of the questions on our mortgage application was do you see your financial situation changing in the near future.

I was 8 months pregnant but we said 'no'.

The mortgage broker never said anything although I did feel a little awkward sitting opposite him as he went through our application.

We had done our sums over and over so I knew we could afford it.