Mortgage and redundancy

[Leavingthebeginning]

Just about to take redundancy and my mortgage is up for renewal in 4 months time. Should I be trying to get an agreement in principle now based on my current salary? I’m hoping to use some of my redundancy payment when it comes through to pay down the mortgage balance so what I need to borrow is likely to be considerable less.

To add, my current account that my salary is paid into is with the sam3 bank as my mortgage so I’m assuming simply renewing with them is out if the question as they’ll be able to see that I’m not receiving my salary if I haven’t found another job in the next few months.

Any advice gratefully received.

i suspect you won't be able to move to a new term because you won't have any income. So you'll be stuck where you are. What happens in 4 months? I presume off a fixed rate deal and onto a standard variable rate? Check this out now.

I'd be wary of using much redundancy money to pay down the mortgage until you have a new job lined up. Otherwise you may run out of money!

In four months I’ll automatically move onto the SVR.

I’m thinking the same which is why I’m wondering if it’s worth trying to get an agreement in principle now on the basis that it will last for 6 months and I’ll be able to renew when my current mortgage comes to an end. Does this seem right?

Depends if your SVR is lower or higher than what you're on now.

I am remortgaging right now, although not with the redundancy bit (sorry to hear). My broker advised me on the best deal.

I am staying with the same lender; and my broker has told me that all that will happen is they will send the offer out to me, I sign it and then it just rolls straight into the new one on the relevant date. No valuations or legal work needed (apart from some internal stuff by the lender I don't even see) and no other documentation seems to be needed from me.

If you are taking redundancy I advise you to do the same - just get it sorted and dealt with.

My fixed term ended last year and I am a single parent on universal credit following redundancy during pregnancy (DC Is also disabled so has delayed a return to work). I was still able to move to a new fixed deal with the same mortgage company, as they don't reassess affordability, probably because there have been no previous issues with payments. My payment went up slightly but I've fixed for 5 years now so I can just forget about it until then.

I do know I wouldn't have been able to seek a new deal with a different lender because of the affordability/employment checks they go through.

Thanks all for the helpful advice.

I am planning to fix for a minimum of 5 years, but obvs concerned about the affordability checks.

SVR is an extra £120 a month, and while doable I’d rather not pay out anymore than necessary at the moment.

but obvs concerned about the affordability checks.

As I said, I have had zero paperwork and all I'll have to do is sign the new deal to confirm my acceptance. There are no affordability checks as far as I have been told. And even if there are, at this moment in time it's all good, right?

Thanks @buzzshitbagbobbly, this is very reassuring.

@Leavingthebeginning we just went onto a new rate as our 2 yr fixed ended. I'm 33 weeks pregnant and planning to have a year off (prob a career break) so was really nervous but as we stuck with our current lender they didn't ask for any financial proof / checks. No valuations or paper work.

Just chose a new rate deal. Went 5 yr fixed as it covers the whole period I'll be off for sure and it was only £15 more expensive a moth. DH can easily cover it once my enhanced and smp stops at 9 months.

Thanks @mintypea5 good to know, and congratulations!

How far in advance can you sign up to a new mortgage deal? Last time I did ours was about 2 months before the end of the fixed term (I stayed in the same lender). I actually just did the application online. I'm sure they asked details about income though - so would you be able to answer truthfully if you got the application processed whilst you are still employed?

Redundancy kicks in at the end of October so there will be a break. Wasn’t sure how long mortgage offers in principle lasted? It’s been a long time since I actually applied for a mortgage.

You shouldn't need a MIP if it's just a fixed deal coming to an end. Your current lender should be able to bake to just move you over to a new rate.

Mine allows you to do so about 2-3 months before your current deal is up

FWIW I've just been told I will get the new deal sent by email and I just have to reply to that.

That is it - nothing else for me to do!

Glad to hear it can be easy - DP has been made redundant and fixed rate ends in new year. Hoping to avoid any issues by switching online with same lender as don't want to go near SVR.

A MIP/AIP would only be relevant if you were going to another lender, and they are issued SUBJECT to affordability checks carried out at full application state, so your application would likely fall down between AIP and actual application being submitted.

Obviously irrelevant if staying with the same lender (which I would recommend for you) but just wanted to clear it up!