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Old 29.03.2012, 16:11
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Losing job; impact on mortgage

Hi, my husband and I are in the process of building a house but it looks like he is going to lose his job (currently around 50% of our household income as we both earn). We currently have an 80% (20% deposit was cash and pension) mortgage and the bank still has some payments to make before the house is completed.

Even if he is unemployed for a while and claims the RAV until he finds something new, we can still comfortably afford the mortgage and our lifestyle. However the mortgage does have clauses about potentially being withdrawn if there are significant changes in financial circumstance.

Does anyone know what kind of a view the banks take to this kind of situation? We would basically no longer be in the realm of their ‘official’ affordability required when we applied for the mortgage some time ago, but would not be in any danger at all of falling behind of mortgage payments etc

Thanks for any input
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Old 29.03.2012, 17:33
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Re: Losing job; impact on mortgage

Did your mortgage require you to take out Income Protection Insurance by any chance?
I know ours did, otherwise they wouldn't give us the mortgage as only one of us is an official 'earner'.
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Old 29.03.2012, 18:03
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Re: Losing job; impact on mortgage

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Hi, my husband and I are in the process of building a house but it looks like he is going to lose his job (currently around 50% of our household income as we both earn). We currently have an 80% (20% deposit was cash and pension) mortgage and the bank still has some payments to make before the house is completed.

Even if he is unemployed for a while and claims the RAV until he finds something new, we can still comfortably afford the mortgage and our lifestyle. However the mortgage does have clauses about potentially being withdrawn if there are significant changes in financial circumstance.

Does anyone know what kind of a view the banks take to this kind of situation? We would basically no longer be in the realm of their ‘official’ affordability required when we applied for the mortgage some time ago, but would not be in any danger at all of falling behind of mortgage payments etc

Thanks for any input
I would not bring the matter myself,
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Old 29.03.2012, 18:28
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Re: Losing job; impact on mortgage

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Did your mortgage require you to take out Income Protection Insurance by any chance?
I know ours did, otherwise they wouldn't give us the mortgage as only one of us is an official 'earner'.
No it didnt, we dont have one......in fact, I asked my insurance man about this a while back and he said there is no such thing, as that's what we pay the swiss gov'ment (ie RAV claims).
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Old 29.03.2012, 18:31
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Re: Losing job; impact on mortgage

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I would not bring the matter myself,
Do you mean you wouldn't disclose to the bank the change in situation?

Perhaps they would find out if my husband's pension changes? As we have pledged some of it as part of the mortgage agreement
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Old 29.03.2012, 18:37
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Re: Losing job; impact on mortgage

you already have the mortgage...

If you keep paying it they won't care...

Your financial circumstances don't really change that much while you get RAV anyway.

If the RAV stops you might have a problem making the payments, but hopefully will have something else before then, and for now I wouldn't worry about it.
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Old 29.03.2012, 18:43
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Re: Losing job; impact on mortgage

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No it didnt, we dont have one......in fact, I asked my insurance man about this a while back and he said there is no such thing, as that's what we pay the swiss gov'ment (ie RAV claims).
There certainly is, it cost us a fortune every year until we decided he was close enough to retirement to cancel it!
We've also got an insurance that will pay off the mortgage if something happens to my husband, but that particular one was only possible because the mortgage was for a house in France.
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Old 29.03.2012, 18:46
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Re: Losing job; impact on mortgage

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Do you mean you wouldn't disclose to the bank the change in situation?

Perhaps they would find out if my husband's pension changes? As we have pledged some of it as part of the mortgage agreement
I would not say a word, unless you want there to be a problem ! Hopefully your husband will have a new job soon.

The pension will move so they will know, however the capital is still pledged.
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Old 29.03.2012, 18:52
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Re: Losing job; impact on mortgage

Most likely, IMO, is that they may ask you to increase the cash deposit on the house, i.e. reduce their risk.

However, it kinda depends what your husband's job is, i.e. whether he is employable or not and what his prospects are.

Good luck.
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Old 29.03.2012, 18:59
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Re: Losing job; impact on mortgage

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There certainly is, it cost us a fortune every year until we decided he was close enough to retirement to cancel it!
We've also got an insurance that will pay off the mortgage if something happens to my husband, but that particular one was only possible because the mortgage was for a house in France.
The only insurance like this that we were offered was if one of us died the house would be paid off. That's for our house in CH. It didn't have anything to do with losing our earnings. We were not offered any insurance for income protection. But you say you canceled it so I'm guessing you didn't think it was worth it? Too much money for too little risk?


As for the OP. I'm with FFM. I wouldn't say anything.

We had a similar as we were out of the country for a few years. But no one ever asked us to prove our income. I'm guessing as long as you keep up the payments, no one is going to bother you.

Let's hope your husband finds a new job quickly.

Good luck!
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Old 29.03.2012, 19:00
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Re: Losing job; impact on mortgage

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I would not say a word, unless you want there to be a problem ! Hopefully your husband will have a new job soon.

The pension will move so they will know, however the capital is still pledged.
I agree, you have absolutely nothing to gain from telling the bank this and possibly everything to lose.

I specifically cut all ties with my bank after they started providing my mortgage and one of the factors was so that they would not have visibility into my earnings/change of job status.
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Old 29.03.2012, 19:08
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Re: Losing job; impact on mortgage

Nothing happens as long as you pay the interest and amortization. People with mortgages get unemployed as well you know.. As long as your obligations towards the bank you are fine. Why would they care how you pay your dues as long as you pay them. Show me a clause in the mortgage agreement/loan papers which states thay you're f....d when there is no job? Worse case scenario is that you sell it or rent it.
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Old 29.03.2012, 19:10
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Re: Losing job; impact on mortgage

What is FFM??

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The only insurance like this that we were offered was if one of us died the house would be paid off. That's for our house in CH. It didn't have anything to do with losing our earnings. We were not offered any insurance for income protection. But you say you canceled it so I'm guessing you didn't think it was worth it? Too much money for too little risk?


As for the OP. I'm with FFM. I wouldn't say anything.

We had a similar as we were out of the country for a few years. But no one ever asked us to prove our income. I'm guessing as long as you keep up the payments, no one is going to bother you.

Let's hope your husband finds a new job quickly.

Good luck!
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Old 29.03.2012, 19:12
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Re: Losing job; impact on mortgage

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I agree, you have absolutely nothing to gain from telling the bank this and possibly everything to lose.

I specifically cut all ties with my bank after they started providing my mortgage and one of the factors was so that they would not have visibility into my earnings/change of job status.
Yes Phil... They are just sitting there and monitoring if your fat salary payment arrives... They could care less... They have their 20% and your legal obligation to pay. If you can't pay they will make you sell it. That's all
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Old 29.03.2012, 19:34
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Re: Losing job; impact on mortgage

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Nothing happens as long as you pay the interest and amortization. People with mortgages get unemployed as well you know.. As long as your obligations towards the bank you are fine. Why would they care how you pay your dues as long as you pay them. Show me a clause in the mortgage agreement/loan papers which states thay you're f....d when there is no job? Worse case scenario is that you sell it or rent it.
no. worst case is they state that there is a significant change in risk and make a margin call on you which you are unable to make. they then repossess the house and sell it, realise a shortfall and bankrupt you in the process.
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Old 29.03.2012, 19:42
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Re: Losing job; impact on mortgage

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no. worst case is they state that there is a significant change in risk and make a margin call on you which you are unable to make. they then repossess the house and sell it, realise a shortfall and bankrupt you in the process.
source of your info? links? documents?documented facts?
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Old 29.03.2012, 19:48
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Re: Losing job; impact on mortgage

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Nothing happens as long as you pay the interest and amortization. People with mortgages get unemployed as well you know.. As long as your obligations towards the bank you are fine. Why would they care how you pay your dues as long as you pay them. Show me a clause in the mortgage agreement/loan papers which states thay you're f....d when there is no job? Worse case scenario is that you sell it or rent it.
There is a clause something like "if there is a significant change in your financial situation (revenue or capital) then we reserve the right to cancel all loans associated with this agreement"

Now whether they would do that even if we keep up all repayments / amortisiations remains to be seen.......
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Old 29.03.2012, 19:52
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Re: Losing job; impact on mortgage

Oh and thanks for the comments so far. Husband works in pharma in an employable position so hopefully would be able to find something before too long. Main concern is how the bank views this kind of thing and if they're quick to take any action (or indeed how supportive they are)
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Old 29.03.2012, 20:07
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Re: Losing job; impact on mortgage

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Oh and thanks for the comments so far. Husband works in pharma in an employable position so hopefully would be able to find something before too long. Main concern is how the bank views this kind of thing and if they're quick to take any action (or indeed how supportive they are)
Don't stress about it. Hubby should concentrate on getting a job. That's the only thing to focus on.
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Old 29.03.2012, 20:09
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Re: Losing job; impact on mortgage

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What is FFM??
Oops. I meant FMF. And that would be short for our dear FatManFilms.

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no. worst case is they state that there is a significant change in risk and make a margin call on you which you are unable to make. they then repossess the house and sell it, realise a shortfall and bankrupt you in the process.
Yes. But that is HIGHLY unlikely. It just doesn't happen. Maybe if/when we get a burst bubble. They have the right to do a lot of things. Doesn't mean they are going to.
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