Turned down for mortgage

[MarketingMess]

I have just been refused a £30k mortgage from my bank, and an independant broker, due to my current employment being temporary. I was furloughed from March until August, when my employer wrote to me saying they were not applying for furlough again, so I still have a contract of employment but no pay, other than a small amount of holiday pay last month. I found local temporary work through an agency on October 5th and am still working there. I also receive a small workplace pension. I should have capital of approx £56k after the exchange of contacts on my current home which I shared with my former partner (tenants in common).Has anyone else been in the same situation, and found an alternative lender?

Sorry @MarketingMess but if you'd outlined those details i'd've been very surprised if you got a mortgage - temporary short term job and 0 pay from your main one. I'd expect you to need to wait until you were back properly with main employer if that's likely in near future? Alternatively can you loon for another perm job?

I would get some mortgage advice from an independent mortgage advisor who can search the whole market. A good one will hopefully be able to tell you which lenders if any are most likely to lend given your specific circumstances. Some of them don't charge a fee and you might be able to add the fee onto the mortgage if they do charge.

Thankyou both, great MN name @Dinosauraddict

No one seems to remember the banking crisis. Caused by ending to people who could not pay. That could well be you op.You need got resolve your job situation and then apply. I am not surprised on cannot get money in your current situation. As far as a lender is concerned, it is not great.

I'm not 100% convinced your employer can just decide to stop paying you. Have you called ACAS to check the legality of what they're doing?

It would really be irresponsible of your bank to make a loan to you in those circumstances. The capital you have which is going towards buying your home is irrelevant if you can’t prove how you’re going to be able to pay the £30k back. But you could try somewhere like L&C or Tussle - they will have vast knowledge on if anyone would lend to you.

You mean you had the temerity to apply for a mortgage when you had no set guaranteed income now coming on here crying about it? You do realise the 2008 crash was all about banks lending to people like you?

Thanks for your input @CoronaIsWatching, but I have only had 5 week gap in my employment in 11 years, thanks to the Pandemic. My credit is excellent. I have no debt whatsoever, my car is paid off, and yes I do remember the 2008 crash THANKYOU ! We can't all be perfect.

But that’s why you have a problem. Lending rules have been tightened so defaults are reduced to a minimum. I do think you need to address your employment status and then apply again when you are actually earning money from a permanent job.

Our bank wanted at least 3 months with no change in pay due to furlough/coronavirus etc, plus no more changes during the months it took to actually buy the house.

As far as I know all lenders have similar rules.

I'm sure you will be fine to get a mortgage soon, but you might have to sit tight in rented for a while until you have enough paychecks with your usual income on.

My sister has had the same issue. But they've managed to find a new deal, that's not as good but still ok. Both her and her partner on furloughed. Personally I think she's mad trying to buy now. When they don't have too.

How do they know they won’t be redundant after furlough? Big big risk.

I was furloughed from March until August, when my employer wrote to me saying they were not applying for furlough again, so I still have a contract of employment but no pay, other than a small amount of holiday pay last month.

Are you on a zero hours contract? Your employer can’t just stop paying you? How long is this expected to last? They should be either furloughing you if they will need you back in the future, or making you redundant if they no longer have a job for you. Is there any chance of the temporary position becoming permanent?

I’m sorry about the mortgage issue. I doubt it is resolvable based on your circumstances until your employment issue is sorted.

Bloody hell, @Toddlerteaplease, I wouldn't be buying in their shoes. I don't think I could sleep at night!

They have money from his house which he sold. But the currently live in a house that comes with his job. But his job is pretty secure despite Covid. They pay peanuts rent and live in a place if outstanding natural beauty. I don't get the urgency!

Sorry I don’t think you’ll get a mortgage with a temporary job and no pay from your main job. I don’t think your main job can just not pay you though, they either need to pay you, put you on furlough or make you redundant.

I'm surprised anybody (unless they have a zero hour contract) would just accept their employer telling them they weren't going to pay them! Did you query the legality at the time, OP?

Lenders seem to be very wary of people who have been or are currently furloughed. We were asked when we applied and there is a stipulation that we inform them if we are furloughed before completion.
We got our mortgage offer at the end of December before the latest lockdown and I am on my knees juggling work and DC but I cannot risk asking for even flexible furlough as it could affect our mortgage offer.

Also check whether your employer is correct in not paying you - I don't understand why they wouldn't continue with furloughing you.

Another one slightly confused why/how your employer just decided not to pay you. Fair enough if there couldn't afford to buy surely that's what the furlough scheme is intended to cover?

Of redundancy. They are probably not going through a redundancy process. Depends on the contract and length of service. But the unresolved issue of employment is not ok for the op or for lenders.

Thankyou all for your comments. Regarding the mortgage, I've resigned to renting from now on, but the rentals I've seen advertised are higher than my mortgage payments would have been, unless I can find a studio flat somewhere. Regarding my regular employer not applying for furlough since August, I am going to e-mail my trade union, the GMB, regarding advice. I have had regular newsletters from the GMB throughout the Pandemic, but they have not featured any similar problems to mine, they seem to be focusing on the safety aspect of returning to work. I now prefer the ongoing temporary work, I've been treated with more dignity than my regular employer, it's just unfortunate this work is not long term. Thankyou all again for sharing your experiences.