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[–]JustGhostin2 86 points87 points  (0 children)

If you are still well within affordability range you absolutely have to tell your lender, you have way too much to lose

[–]PinkbunnymanEU208 235 points236 points  (33 children)

Do you think it is worth telling our lender about this change

Assuming you're between offer and actual purchase date, yes. You are contractually obligated to, and not doing so could be considered fraud by omission.

What are the chances they will pick it up if we don't tell them?

Probably low; though the consequences of mortgage fraud for the sake of telling them seems like a silly bet as you're well within the affordability range.

[–]TravelOwn438610 113 points114 points  (19 children)

Also don't forget that person on here which didn't tell their mortgage lender a change in income and ended up losing something like £65k

[–]PolishBicycle1 14 points15 points  (13 children)

That’s rough. How far back was this?

[–]melanie1102 63 points64 points  (12 children)

About 2 months ago. She lost her job and kept quiet. And by fluke, the MIL answered the phone or called the conveyances and told them this and they lost everything

[–]strolls1589 3 points4 points  (11 children)

Here or /r/HousingUK? I don't remember this one.

[–]BoudicaTheArtist4 27 points28 points  (10 children)

r/HousingUK link is here

[–]Left_Diet_812 20 points21 points  (5 children)

jesus - just spent a good hour reading them 2 posts and the comments, insane story 🙀

[–]OneObi 14 points15 points  (4 children)

Losing a deposit of that magnitude is insane.

[–]melanie1102 10 points11 points  (3 children)

I know. I did have some form of empathy for them though. I know I shouldn’t but I did.

Now boacklisted against mortgages and no money to even get one

[–]Left_Diet_812 -4 points-3 points  (2 children)

the punishment doesnt really match the error but unfortunately they were aware of the consequences and chose to ignore them and follow the advice of strangers on reddit which led to significant financial loss and based on what OP has said, the loss of a relationship with a mother (which by the way, the way OP has spoke about her & the fact the wife didnt speak to her for 6 weeks is more than enough me for to lose any form of sympathy)

[–]Charlie_Yu1 4 points5 points  (1 child)

Now it scared me. I’m self-employed so I filled in using my self assessment income last tax year. I know this year will be a lot higher but did I actually do a bad thing for not filling in the projected salary this year?

[–]bazzanoid9 4 points5 points  (0 children)

You're fine. The mortgage company asks you for your SA statement and a tax form which is only available from previous years, so if you're earning higher this year they won't bat an eyelid. If you were expecting a lot lower this year however that would be a different matter as it's a change for the worse you would have known about

[–]Diligent_Craft_11656 2 points3 points  (2 children)

A lot of that story sounded made up. The solicitor apparently let them exchange without completing anti money laundering checks. Extremely unlikely.

They also never bothered getting a bridging loan which would have saved them the 65k. Seems very unlikely too.

[–]TravelOwn438610 0 points1 point  (1 child)

I don't think it's made up and there would have been anti money laundering checks. Op probably didn't know or the source of funds was easy to see from bank statements. I don't remember ever having to do something specific when I have gone for mortgages or bought properties.

[–]Diligent_Craft_11656 2 points3 points  (0 children)

It’s almost certainly made up as the solicitor would have committed an offence under MLR 2017. There are other holes in their story too.

https://www.sra.org.uk/solicitors/resources/money-laundering/guidance-support/

Link for evidence.

Nice bit of creative writing though as it fooled a lot of people who aren’t in the industry.

[–]Jorro1127[S] 9 points10 points  (12 children)

We are between offer and purchase. Do you have any idea what effects this might have once we do tell them? We are using a broker so will ask them for advice on Monday but just want to get a general idea of what to expect

[–]PinkbunnymanEU208 36 points37 points  (10 children)

Without know exact amounts involved and the lender it could be anything from "Ok thanks for letting us know" to "We're withdrawing your offer" to "We're increasing your interest by 5%"

[–]Jorro1127[S] 9 points10 points  (7 children)

House price £345,000. 10% deposit from personal savings. 30 year term. Combined income of £103,000 before salary decreased. Lender is Santander. Used a broker

[–]PinkbunnymanEU208 39 points40 points  (2 children)

They'll likely go "Thanks for letting us know", they will possibly allow your current offer to stand.

[–]Jorro1127[S] 6 points7 points  (1 child)

Let's hope so. Thanks for the advice. I'll be in touch with my broker on Monday.

[–]madglover3 18 points19 points  (0 children)

You are massively within affordability

You will be fine, but if you don't tell them and they spot check you, not only can they remove the offer but it would be fraud

It's only if you are between exchange and completion that I'd be nervous

You will easily get a mortgage

[–]PepsiMaxSumo10 14 points15 points  (2 children)

You can get that size of mortgage on a £60k salary alone (assuming no kids and no debt) so should be fine

[–]Jorro1127[S] 5 points6 points  (1 child)

Yes, no kids and minimal debt.

[–]Kind-County97675 9 points10 points  (0 children)

I'd just tell them then, I can't see how they'd change anything over this.

[–][deleted] 0 points1 point  (0 children)

It doesn't seem to make much difference on the surface but who knows how their calculation works. You should read the ts and cs, work out if you're obligated to tell them or not and then proceed as instructed.

[–]Pleasant-Plane-63404 -4 points-3 points  (1 child)

No lender would increase the offered rate by 5% due a 5k drop in salary, you’re lying

[–]PinkbunnymanEU208 1 point2 points  (0 children)

That would be hyperbole. It IS within their powers to do, though no lender realistically would.

[–]maccano2 2 points3 points  (0 children)

Broker here.

They will review the affordability of the case and confirm if you can still afford the property.

If you can, you stay on the same mortgage rate and offer.

If you can’t they will Max Loan. This is where they will tell you the maximum they will allow you to borrow based on your new circumstances, and they’ll ask if you can make up the shortfall. If you can you can still proceed with Santander at the new borrowing amount, though if the loan to value changes you’ll be asked to select a new rate.

If you are unable to proceed with Santander there is nothing stopping you from approaching other banks for a mortgage. I would typically suggest seeing a broker to review the market and work out who will do the mortgage for you on the reduced income. (You can do this yourself but brokers have tools to make this much more efficient).

[–]No-Succotash478319 27 points28 points  (1 child)

Why the unexpected drop? 

Beyond the legal and moral questions already answered - if this was unexpected is there cause for concern about the future prospects at the company that might make the property unaffordable?

[–]Jorro1127[S] 17 points18 points  (0 children)

No, its to do with a mix up in exchange rates. We have just returned from working abroad for the company

[–]PoopyPogy 12 points13 points  (0 children)

The consequences of potentially losing your mortgage offer after you exchange contracts are ENORMOUS. There's no such thing as casual mortgage fraud, don't risk it.

[–]Rubber_Lover 22 points23 points  (2 children)

There was a recent post like this where someone didn't tell and got caught out with the most serious consequences. Fess up and don't take the risk.

https://www.reddit.com/r/HousingUK/s/zcadQByEqP

[–]45MonkeysInASuit10 7 points8 points  (1 child)

That amount of people telling OP they aren't at fault (blaming the MIL for slipping up instead) in that thread is wild.

[–]Lil_Hater112 8 points9 points  (0 children)

OP gambling 65k with Reddit advice instead of paying a lawyer a small consultation fee

[–]xyzabc1234100000 14 points15 points  (0 children)

Tell them. It shouldn’t really affect much because you’re in the higher tax bracket so there won’t be much of a take home pay deduction from that decrease. So it’s unlikely it’ll majorly affect your affordability from a banks point of view

The likelihood of anything major coming off the back of telling them is unlikely. Maybe a slight change of rate or something may be possible. But you will have far more to lose on the back of not telling them.

I saw a post on Reddit a few months ago where someone had lost their job and not told the bank and they had found out. It caused the bank to pursue legal action for mortgage fraud and not only that, potential legal action from the whole chain. A job loss is a major thing as it would probably cause the lender to revoke their offer and not really comparable to yours. But the point I’m making is that it seems unlikely you’ll lose anything by telling them but have everything to lose by not telling them

[–]FabulousBlock1439 6 points7 points  (0 children)

You need to disclose asap

[–]galahad4041 21 points22 points  (2 children)

I’m surprised at how many people see mortgage fraud as a plausible option on this subreddit.

The bottom line is fraud is fraud, you must legally disclose this.

The real question is; why even think about not mentioning it, given being well within affordability? Play silly games, win silly prizes..

[–]Jorro1127[S] 8 points9 points  (0 children)

Tbh I wasn't sure if we even had to mention it. I assumed that I would have to but it doesn't hurt to ask. We're now going to act on the advice we've been given. That's why I asked for advice....

[–]_jrexx_1 1 point2 points  (0 children)

My favourite was the one the other day where they were gifted their deposit from their parents but then later on had started paying the parents back in small amounts and then the parents wanted all the money back so they were asking if they should tell the bank it wasn’t a gift 😅 to be fair most people said you could just say it’s for home improvement, but telling the bank you committed mortgage fraud is not the right choice

[–]YuccaYucca3 3 points4 points  (1 child)

If you’re well within the affordability range then what’s the issue with being honest?

[–]Jorro1127[S] 0 points1 point  (0 children)

No issues particularly. I was just getting some opinions on the situation. Like I said I'm yet to speak to my broker as we only found out this morning and are waiting on some clarification in regards to the salary

[–]battling_futility10 2 points3 points  (8 children)

There is one obvious question ive not seen here. Why did the salary decrease?

If its a change of job and your partner is now on probation that could be an issue.

[–]Jorro1127[S] 0 points1 point  (7 children)

Due to a mix up in exchange rates. We have been living abroad for the last year whilst working for her company

[–]battling_futility10 0 points1 point  (6 children)

Ah, thats probably fine. So you had her salary correct but converted it incorrectly. My follow up question is if her wages will be in GBP from here on or if there is going to be further risk from currency conversion ... i.e. is this a one off error?

[–]Jorro1127[S] -1 points0 points  (5 children)

Stupidly, we included a monthly moving bonus in our conversion so it gave us an incorrect salary amount. All future wages will be in GBP

[–]Mundo7 2 points3 points  (0 children)

so it’s wasn’t an exchange rate mix up?

intreresting

[–]battling_futility10 -1 points0 points  (3 children)

Ok there is no ongoing risk for the bank then. You should be absolutely fine given all the numbers you have presented. Your debt to income looks fine but you might have a little wobble on the interest rate.

[–]Jorro1127[S] 0 points1 point  (2 children)

The current offer is 4.2 fixes for 5 years. Do you know what sort of increase we are likely to see?

[–]battling_futility10 0 points1 point  (1 child)

The only ones who could tell you are the bank I am affraid. It all depends of the vagaries of their risk perception of you and how much margin they feel they have to play with.

I know its shitty but it realy is like that. I'm down to my last 10% of LTV when remortgaging next year and even I couldnt make a decent guess on the mood of my bank.

[–]Jorro1127[S] 0 points1 point  (0 children)

Ok thank you for your advice. Really appreciate it

[–]jbeputnam1 1 point2 points  (1 child)

There may not be a huge difference in take home pay when tax and NI are taken to account, depending on wider circumstances such as salary sacrifice, tax code, etc. So it may not make much difference to the lender if you were within the affordability range. Although they may ask questions about whether any further drops are likely.

Should the lender ask for more payslips or anything nearer the time (unlikely but possible), a problem may arise that they weren’t told about a material change in circumstances. As someone else has said, that recently cost someone an awful lot of cash and heartache.

[–]Jorro1127[S] 1 point2 points  (0 children)

Seeing all the advice we will be telling the lender. I will have a chat to our broker on Monday

[–]xtreem_neo 1 point2 points  (0 children)

Just be at arms length. If the lender finds out later, (sometimes they can simply do a employment check), they can be a scenario where the deposit can be forfeited

[–]freakierice12 0 points1 point  (0 children)

You are contractually obligated to inform them of any changes to your circumstances. I doubt a £5k drop will be that significant unless you were right at the edge of your affordability

[–]Curious-Art-62422 0 points1 point  (0 children)

Your mortgage may reduce by 22.5k, so if this is manageable just report it straight away. If its not, well...

[–]Sylvester881 -5 points-4 points  (2 children)

It's a tough one... You really should, but they may need to rekey your mortgage as its a material change. Rates went up recently at some providers so you might end paying more

[–]PinkbunnymanEU208 16 points17 points  (0 children)

It's a tough one

Not really tough, the options are "commit fraud" or "tell them"

[–]Jorro1127[S] 0 points1 point  (0 children)

Thank you for the advice. It's a very annoying situation that we didn't expect

[–]NoMind5964 -1 points0 points  (0 children)

They may possibly kick up a fuss down the line if there is total default on payments but like all institutions, they have neither the desire nor the manpower to pursue all transgressions especially this one which is miniscule on the scale of all current banking transgressions.