What to do if You’re Facing Redundancy Before, During or After a Mortgage Application
The key information you need to know about redundancy, risk of redundancy and mortgage applications.
Are you currently facing Redundancy or have been made redundant in the last 12 months?
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Redundancy can have a major impact on a mortgage application, whether it has come before you’ve applied for an agreement in principle, in the middle of the process or after a full mortgage offer. But did you know it’s still possible to get a mortgage if you’ve been made redundant?
In our guide to mortgages and redundancy, you’ll learn how it can be done, what your options are, and how the right mortgage broker can help you rescue your plans.
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Can you still get a mortgage if you’re facing redundancy?
Yes, potentially, but you should speak to an expert before you apply as mortgage applications are often ill advised during times of financial uncertainty. Many mortgage lenders are likely to reject you outright anyway, but there are still ways you could theoretically get a mortgage.
Some mortgage providers are flexible when it comes to your employment and finances, and if you can prove to them that you can still afford a mortgage despite losing your main job, there could be options available; but you’ll likely need to use a mortgage broker to find them.
Speak to an expert in redundancy during and after mortgage applications
Options that could be available to you
You could potentially still get a mortgage if you’re facing redundancy, or were recently made redundant, if any of the following applies to you…
- You have another job lined up: Not all lenders will be happy to offer you a mortgage if you’re yet to start your next job, but some might consider you if you can provide water-tight evidence of future employment and the timing works out.
- You’re applying with somebody else: If you’re making a joint mortgage application and the loan is affordable on the other person’s salary alone, you might still be approved for a mortgage, although the lender might rethink the amount you can borrow.
- You can increase your deposit: Perhaps you’re getting a decent redundancy payout and can use it to substantially increase your deposit. Your chances of mortgage approval would increase, although you will almost certainly need some form of income too.
- You have other forms of income or assets: It’s possible to get a mortgage if you’re cash poor but asset rich. Another option could be to apply for a mortgage based on other sources of income you might have, such as benefits or freelance work on the side.
- Family mortgage options: If you have family members who are willing to support you, there are specific types of mortgages that could increase your chances of approval with little or no income, such as a joint borrower, sole proprietor arrangement.
As you can see, there are a range of possible options for people who want to go ahead with a mortgage application despite being at risk of redundancy or having been made redundant, but many of them do require you to have at least some form of income to fall back on.
In any case, you should speak to a mortgage broker before you apply as there could be risks to consider if you’re experiencing times of financial uncertainty.
What to do if you’ve been made redundant in the middle of a mortgage application
Whether you’ve been made redundant after agreement in principle, in the middle of the application process or after a firm mortgage offer, the situation is the same. The lender has the right to withdraw a mortgage application right up to completion, and the chances of them doing that are likely to be high if you have a redundancy looming and things are uncertain.
On the flipside, you could salvage your mortgage at any of these stages if redundancy has put it at risk or your lender has withdrawn your application because of it.
Here are the steps to follow…
- Speak to a mortgage broker: This is an essential first step as you will need to make sure it’s in your best interest to continue with your application in light of a redundancy and the uncertainty it creates. If getting a mortgage is still viable, your broker will guide you from here, help you get the best deal or revive your plans if they’ve stalled.
- Get your paperwork ready: Your broker will need you to produce paperwork to support your application and you can find out what documents you’ll need here. Don’t forget to include evidence of how you plan to make your mortgage payments after redundancy.
- Let your broker take things from here: One of the main benefits of using a mortgage broker is that they do all of the legwork for you. The brokers we work with have deep working relationships with lenders who have a high enough appetite for risk to offer mortgages to people at risk of redundancy or who’ve been made redundant. With their help, you can rest assured that you’ll be paired with the right lender, first time.
We offer a free broker-matching service that can pair you up with a broker who helps people at risk of redundancy get mortgages and revive applications every day. Make an enquiry with us online and we’ll set up a free, no-obligation chat between you and them today.
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Customer success stories
“I feared the worst about my home purchase when I was made redundant just before the exchange of contracts. The mortgage would have been affordable on my wife’s wage plus my Universal Credit, but our bank thought the deal was too risky and pulled the plug.
“This was hugely frustrating, especially because we had no concerns about how we’d make our mortgage payments. I was also confident I’d find another job soon enough, but in the meantime, the home we really wanted was about to slip through our fingers.
“I was desperate at this point, so I went online in search of a second opinion. This led me to Online Mortgage Advisor’s website where I learned that a mortgage broker could be the key to getting our plans back on course. I used their advisor-matching service and was introduced to Tony, a friendly broker who claimed to have experience helping customers in our situation.
“He began by reassuring us that getting a mortgage was still possible and quickly drew up a list of lenders who’d consider us and steered us towards the right one. Tony also helped us with our paperwork and sourced some great protection insurance for us. Fast forward a few months and we were in our new home and my job situation is sorted. Thanks, Online Mortgage Advisor!”
Remortgaging before and after redundancy
If you’re tied into a mortgage and redundancy is on the cards, one of the ways you might look to mitigate that is to remortgage your home. Whether your application is approved will depend on your circumstances, and whether you’re remortgaging before or after redundancy.
If you know in advance that redundancy is on the horizon, you may be able to prevent future financial difficulty and reduce your monthly payments by remortgaging your home.
A broker can help you secure the best remortgage deal. As you’ll hold more equity in the property than you did in your initial application, this should be reflected in your new quotes.
If your job is at risk, it may be an ideal time to remortgage and secure a cheaper rate. Your application is more likely to be accepted if you remortgage before, rather than after, redundancy.
If your salary plays a key role in covering your payments, many mortgage providers are unlikely to authorise a remortgage after redundancy. However, if you have a joint mortgage and your partner’s income proves sufficient, some lenders may accept your application.
The best advice if you find yourself in this situation is to speak to your mortgage provider as early as possible. If you have any doubts about whether you’ll struggle to continue repaying your loan, the chances are they will try to help you.
Some may offer you a “mortgage holiday” if you have a good history of meeting your payments. Others may agree to reduce your commitment to interest-only repayments, extend the mortgage term, or move you on to a cheaper deal.
Each provider will have different approaches and eligibility criteria, but many are happy to help you if you’ve been reliable with making payments so far. After all, repossessions cost lenders money, so it’s in their best interests to assist you in times of need.
Key takeaways from this guide
You can get a mortgage if you’re at risk of redundancy:Or even after a redundancy, under the right circumstances. As long as you have the ways and means to pay your mortgage each month, there could be lending options out there for you.
Speaking to a broker is an absolute must:Expert advice is essential if you’re applying under the threat of redundancy or after one, as the risk is likely to be higher. A broker can advise you on whether it’s in your best interest to continue with your application.
We can match you with the right broker:We work with brokers who help people get a mortgage when they’re at risk of redundancy or have been made redundant. They specialise in this area, can boost your chances of mortgage approval first time, and can make sure you get the best possible deal via their extensive lender contacts.
Call 0808 189 2301 or make an enquiry and we’ll introduce you to your ideal mortgage broker and set up a free no-obligation chat between you and them today.
Not to a mortgage lender, but with voluntary redundancy you might be in a stronger position to increase your deposit as the financial compensation is typically higher than compulsory redundancy. But you should still speak to a broker before making an application.
Yes. You can get protection to cover your mortgage in case of redundancy, though the policy will depend on what you want covered and your personal circumstances.
Mortgage payment protection insurance is commonly referred to as either mortgage cover for redundancy, mortgage redundancy insurance, or mortgage redundancy protection, and can help you with your monthly repayments if you lose your job or are unable to work.
You can read more in our guide to mortgage redundancy cover.
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